Key actions & Timeframes for Trust beneficiaries & trustees
A summary of the key actions and timeframes for trust beneficiaries and trustees of a discretionary trust for the 2023-24 tax year:
Trustee Actions (2023-24 Tax Year)
Collect Trust Income (e.g., rental income, dividends):
Throughout the Year – Trustees manage trust income and keep records of all income received.
Calculate Income Tax:
Ongoing, by Year-End (5 April 2024) – Trustees determine the amount of tax owed on trust income and apply the 45% tax rate for discretionary trusts.
Issue Payments to Beneficiaries:
Throughout the Year, as Scheduled – Trustees decide if and when to distribute income to beneficiaries. For example, if the trust receives rental income, trustees might pay £1,000 to a beneficiary, withholding 45% tax (£450).
Complete R185 Form:
By 5 April 2024 – Trustees provide an R185 form to each beneficiary receiving income, showing gross income and tax paid on their behalf.
Submit Trust Tax Return to HMRC:
By 31 January 2025 (if filed online) – Trustees file the trust’s tax return, reporting all income, deductions, and tax paid.
Beneficiary Actions (those receiving income from Trust) (2023-24 Tax Year)
Keep R185 Form:
Upon Receipt from Trustee – Beneficiaries must retain the R185 form for use in their own tax reporting.
Complete Self-Assessment Tax Return:
By 31 January 2025 (if filed online) – Beneficiaries report trust income on their tax return, including tax credit for 45% already paid by trustees. This return should also include details of other income sources.
If you do not complete a Self Assessment tax return, use form R40 to claim for a repayment of tax on your savings and investments.
Claim Tax Refund (if eligible):
After Filing Return – If their personal tax rate is below 45%, beneficiaries may receive a tax refund based on their adjusted tax liability.
If you need guidance on completing the R185 form or have questions about how it applies to your situation, our experts are here to help. Contact us today for clear and reliable advice on R185, ensuring that you meet all the necessary requirements and avoid any issues. Get in touch now for expert assistance!
