Discretionary Trust

[Lucky4Seven]

I need to ask.

So, an update on my situation regarding a Discretionary Trust.

Because the Trustees won't pay me my allowance my mum wanted me to have, I've got a Solicitor onboard who is persuing a claim for Breach of Trust.

He also going for the fund to pay my legal costs so I'm not out of pocket.

Its being done as a No Win No Fee.

But my question is this; it is not classed as income because its a gift in the will for me to have my inheritance monthly rather then all in one go, would I have to pay income tax!?

[des8]

Glad to see you are taking professional advice

You don't pay income tax on the money received from the trust, but the trust income (if any) may be taxable.

From Trusts and taxes: Beneficiaries - paying and reclaiming tax on trusts - GOV.UK (www.gov.uk:

Accumulation or discretionary trusts

With these trusts all income received by beneficiaries is treated as though it has already been taxed at 45%. If you’re an additional rate taxpayer there will be no more tax to pay.

You may be able to claim tax back on trust income you’ve received if any of the following apply:

• you’re a non-taxpayer
• you pay tax at the basic rate of 20%
• you pay tax at the higher rate of 40%

You can reclaim the tax paid using form R40. If you complete a tax return, you can claim through Self Assessment.

[Lucky4Seven]

Glad to see you are taking professional advice

You don't pay income tax on the money received from the trust, but the trust income (if any) may be taxable.

From Trusts and taxes: Beneficiaries - paying and reclaiming tax on trusts - GOV.UK (www.gov.uk:

Accumulation or discretionary trusts

With these trusts all income received by beneficiaries is treated as though it has already been taxed at 45%. If you’re an additional rate taxpayer there will be no more tax to pay.

You may be able to claim tax back on trust income you’ve received if any of the following apply:

• you’re a non-taxpayer
• you pay tax at the basic rate of 20%
• you pay tax at the higher rate of 40%

You can reclaim the tax paid using form R40. If you complete a tax return, you can claim through Self Assessment.

Thank you very much xx