HMRC tax update: Trusts and Estates

New guidance has been issued by HMRC regarding the informal arrangements for the taxation of trusts and estates.

Essentially from 6/4/2024, trusts and estates with income of all types up to £500 do not pay tax on, or report, that income as it arises. Where income exceeds that amount, tax will be payable on the full amount.

For estates, the £500 tax-free amount applies:

  • for every tax year of administration, but unused amounts don’t roll over to subsequent years
  • to chargeable income, after taking off ISA income which continues to be exempt until closure or up to 3 years following the death

Trusts and estates do not need to report income tax where their only source of income is savings and the tax otherwise payable is no more than £100

More detail can be found here-

HMRC Trusts and Estates Newsletter: April 2023

If you have been appointed as an executor or a trustee in an estate or trust, our friendly experienced Life Planning team are able to help you with the administration of the estate and/or trust and assist you together with guide you on your reporting duties to HMRC.

Hudda Morgan
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