Taxation (International and Other Provisions) Act 2010 Schedule 7 Part 11

Relocation of assessment rules for trustees and personal representatives

Schedule 7 Part 11 moves the rules about assessing income tax on trustees and personal representatives from the Finance Act 1989 into the Taxes Management Act 1970, where they sit more logically alongside other assessment procedures.

  • Income tax on trust income can be assessed on any one or more of the current or subsequent trustees of the settlement
  • Income tax on a deceased person's income can be assessed on any one or more of the current or subsequent personal representatives
  • The provision previously in section 151 of the Finance Act 1989 is relocated as new section 30AA of the Taxes Management Act 1970 for ease of reference
  • A related transitional provision in ITTOIA 2005 is removed as it is no longer needed following earlier amendments

Example

A trust was established in 2008 with three trustees: Alice, Bob, and Carol. In the 2009–10 tax year, the trust receives rental income of £50,000 on which income tax is due. Bob resigns as trustee in 2010 and is replaced by David.

Under section 30AA of TMA 1970, HMRC can assess the income tax on the £50,000 of rental income arising in 2009–10 on any one or more of Alice, Bob, and Carol (who were trustees in the year the income arose). HMRC can also assess it on David, because as a subsequent trustee he falls within the definition of "assessable trustees." HMRC does not need to assess all of them — it can choose to assess just one trustee if it wishes.

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