Income & CGT liability when Income is mandated to Beneficiary for Discretionary Trust
SW1990
Member
Hi All,
I wonder if anyone is able to clarify for me how the mandating to a beneficiary works on a DT.
The client has regular withdrawals of £300 p/m currently direct to him. The income is direct and has fallen under the mandating rules. Therefore he is liable at his own rates for income tax etc and can use his personal allowances. I am guessing the Trustees have nothing further to do as the tax return is done by the beneficiary themselves in this respect?
If .say a rebalance has happened within the GIA (held under the DT) and gains are crystallised, would the CGT also fall on the beneficiary or would still the Trustees would are liable at the trust rates?
Comments
That's right - income direct to beneficiary means there's nothing for trustees to report.
CGT however remains with the trust - and a 50% allowance is available.
Capital always with Trust. Income can be Trust or Beneficiary.
Fab - exactly what I thought - thanks for clearing up @arongunningham