Online News - Business News - Date: February 2010
New Tax Rate for Trusts
If you are Trustee of or Professional Adviser to (or even a potential beneficiary) then the change to the rate of tax applying to Trustees from 6 April 2010 will affect you and should be planned for.
With effect from this date it will increase to 42.5% on grossed up dividend income and to 50% on all other income. This will impact on trustees looking to distribute income, and on beneficiaries receiving income, from discretionary trusts. Assuming the £1,000 basic rate band has already been used and the trust has not incurred any expenses, the increase in the effective rate of tax on dividend income arising to trustees of discretionary trusts is 11.1% assuming it is accumulated.
If the dividend income is distributed to the beneficiary then the position becomes more complicated and costly. It is beyond the scope of this article to cover this in detail but we would be happy to advise on alternative and more tax efficient investment strategies for any trusts you maybe associated with.
For more information or advice please contact Peter Blinkhorn on 0113 204 4214 / 0789 427 9292 or email peter.blinkhorn@kirknewsholme.co.uk.
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