Bare Trust Taxation
Sean_Fernyhough
Member
Death in Service paid to bare trust for minor. A long delay in the payment resulted in the DIS scheme administrators paying interest in addition to the settlement. I'm considering the income tax implications. Is the interest actually interest or compensation? Does the £5,000 starting rate of tax come in to play?
Comments
You need to ask the people paying but I would imagine it will almost certainly be interest.
And if so personal allowance, starting rate and personal savings allowance all in play so no tax probably.
If it is over £10k interest technically the minor needs to self assess.
Thanks Les,
I'm happy with the wording on the correspondence from the payer that it is interest. I've already Yes, the interest is over £10,000 and I have already advised the adviser that a personal return needs completing by the minor's guardians (PS, both parents are alive but have no involvement in the child's care).