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HMRC internal manual

Trusts, Settlements and Estates Manual

Trust management expenses: allowable expenses: specific items: personal expenses of beneficiary

A trustee may pay expenses that are the personal liability of a beneficiary. For example, a beneficiary may occupy a property belonging to the trust. The trustees could pay items that are the occupier’s responsibility, as opposed to the owner’s (trustees’) responsibility. This might include gas, electricity and telephone bills, rates or Council tax (including business rate if appropriate).

Such expenses are not the trustees’ and so are not allowable as TMEs for trustees of accumulation/discretionary trusts or beneficiaries of IIP trusts.

Treatment of payment of personal expenses - taxation of beneficiary

See TSEM3786-3787.