Dividend tax changes: how they affect trusts and beneficiaries

Peter Rayney FCA CTA TEP, examines the impact of dividend tax changes to trusts and their beneficiaries from bare trusts to interest in posession trusts, starting by highlighting some very important anti-avoidance rules, which effectively take precedence over all the other provisions, with worked examples of how to use trusts effectively

The Finance Act 2016 changes in dividend tax for individuals received widespread publicity. However, very little has been mentioned about the impact of these changes on trusts and their beneficiaries. With many trustees now starting to deal with ‘their’ trust tax returns for 2016/17, this article takes a look at the income tax treatment for different types of trusts, concentrating in particular on the impact of the new dividend tax regime.

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