Income Tax Act 2007 section 504

Treatment of income of unauthorised unit trust

Section 504 sets out how the income of an unauthorised unit trust (UUT) is taxed, establishing that the trustees are the taxable persons and specifying the rate at which their income is charged.

• The taxable income of a UUT belongs to the trustees for tax purposes, not the individual unit holders
• All income of the UUT trustees is charged at the basic rate of income tax — the special trust rates do not apply
• Certain tax credits and deemed income tax payments that would normally attach to income received are switched off for UUT trustees
• Annual payments made to unit holders fall outside the special discretionary payments regime, and separate rules govern trustee statements of tax deducted