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Same, but different

26 October 2016 / Mark Wallace
Issue: 4573 / Categories: Comment & Analysis
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The implication of the personal savings allowance and dividend nil-rate for trusts and estates.

KEY POINTS

  • The new rules on the taxation of dividends did not mention the implications for trusts.
  • No need to notify HMRC when there is only savings interest and liability does not exceed £100.
  • A special transitional rule will apply when an estate received dividends in 2015-16 or earlier.
  • Discretionary trusts still have the £1 000 ‘special rate’.
  • FA 2016 amends the rules so that a trust receives full credit for the tax that is paid on dividend income.

When the new £5 000 dividend nil-rate band and the personal savings allowance were initially announced the concepts appeared to be simple and straightforward. However there was no mention of how they would be applied to trust and estate taxation causing a degree of speculation among practitioners. Further...

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