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Revenue and Customs Brief 20/07

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HM Revenue and Customs -Tax Authorities

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Issued 9 March 2007

New form R185(Trust Income) for 2006-07

A new version of form R185(Trust Income) will be available from April 2007. It has been improved and updated to reflect a change in the law. The new version of the form includes a new box 7.3A with guidance.

Trustees of settlor-interested trusts should use only the new version, imprint HMRC 10/06, to record discretionary payments to beneficiaries other than the settlor for the year 2006-07.

The new form will be available from the internet. Customers without web access can obtain a copy of the form from their usual Trusts office from April.

Background

In Finance Act 2006 there were changes to the way discretionary payments from settlor-interested trusts are taxed. If the trustees of such a trust make a payment to a beneficiary other than the settlor, the beneficiary is treated as having paid tax at 40%, but this notional tax credit is not repayable. Box 7.3A is used to record this type of payment. Discretionary payments from non-settlor-interested trusts are not affected.


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Crown Copyright 2007.

A licence is need to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs under the terms of a Click-Use Licence. Tax briefs are updated regularly and may be out of date at time of reading.



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Article Published/Sorted/Amended on Scopulus 2007-03-09 17:15:43 in Tax Articles

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