Income Tax Act 2007 section 812

Case where limit not to apply

Section 812 removes the normal cap on income tax liability for non-UK resident trustees where the trust has a beneficiary who is UK resident.

• The income tax limit for non-UK resident trustees under section 811 is disapplied if any beneficiary of the trust is either a UK resident individual or a UK resident company.
• A beneficiary includes any actual or potential beneficiary who is entitled, or may become entitled, to receive some or all of the trust's income (Condition A), or for whom income may be paid or applied at the trustees' discretion (Condition B).
• References to income under the trust extend to trust capital insofar as that capital represents amounts originally received by the trustees as income.
• The effect is that where a trust has any UK-connected beneficiary, the trustees cannot rely on the non-resident liability cap and are liable to income tax without limit in the normal way.