UK Trust Tax (2026/27)

1. Overview of UK trust taxation

A trust is a legal arrangement under which one or more people (the trustees) hold property for the benefit of one or more other people (the beneficiaries) on terms set out in a trust deed by the original owner (the settlor). UK trust law dates back to the medieval Court of Chancery and the modern statutory framework sits principally in the Trustee Act 2000, the Inheritance Tax Act 1984, the Taxation of Chargeable Gains Act 1992, the Income Tax (Trading and Other Income) Act 2005, and the Income Tax Act 2007. The tax treatment is deliberately harsh because trusts historically offered a route to shelter income and capital from progressive personal rates; the modern code closes those routes with the Rate Applicable to Trusts, the relevant property regime for inheritance tax, the parental settlement rule, and the settlor-interested attribution rules.

Four practical categories cover most family situations. A bare trust is a holding structure for an absolute beneficiary: tax is paid by the beneficiary on their personal return. An interest-in-possession (IIP) trust gives a named life tenant the right to the income as it arises: trustees pay basic-rate tax, the life tenant tops up to their own marginal rate. A discretionary trust leaves trustees with absolute discretion over distributions: the trust itself pays the RAT of 45% or 39.35% on dividends. A settlor-interested trust is one where the settlor or their spouse can benefit, and all income is attributed back to the settlor by anti-avoidance. Each type interacts differently with the three UK taxes (income tax, capital gains tax, inheritance tax), and the optimal vehicle depends on the family objective.

Headline figures for 2026/27: the RAT is 45% on non-dividend trust income above £500 and 39.35% on dividend trust income above £500; the trust CGT annual exempt amount is £1,500 and the rate is 24% on all gains from 30 October 2024; the IHT entry charge on a chargeable lifetime transfer into a relevant property trust is 20% above the available nil-rate band; the ten-year periodic charge is up to 6% on the value above the nil-rate band; the exit charge is up to 6% pro-rated by the number of quarters since the last ten-year review. The Trust Registration Service has been mandatory for express trusts since 1 September 2022 and penalties for non-registration run up to £5,000 per offence. This guide is general information based on published HMRC and gov.uk material, not legal or tax advice for any individual trust.

2. Trust types - bare, IIP, discretionary, settlor-interested

Bare trust. The simplest UK trust. The beneficiary has an absolute right to both income and capital from age 18 (16 in Scotland under the Age of Legal Capacity (Scotland) Act 1991), and can require the trustees to transfer the property to them on demand under the rule in Saunders v Vautier (1841). For tax purposes a bare trust is transparent: the trustees are merely nominees and all income and gains are taxed on the beneficiary at their personal rate and with their personal allowance and annual exempt amount. Bare trusts are commonly used to hold investments for minors (subject to the £100 parental settlement rule discussed below), to hold property for a vulnerable but not legally-incapable adult, or as a simple nominee arrangement for joint property purchases.

Interest-in-possession (IIP) trust. Also called a life-interest trust. A named beneficiary (the life tenant) has an immediate right to the trust income as it arises; the capital is preserved for one or more remainder beneficiaries. IIP trusts are commonly used in wills to provide income to a surviving spouse for life with the capital passing to children on the spouse's death (a "life-interest will trust"). For income tax the trustees pay basic rate (20% non-savings, 20% savings, 8.75% dividend) on the income before it is mandated to the life tenant. The life tenant grosses up the receipt and takes a tax credit for the trustees' tax. For IHT, IIP trusts created on or after 22 March 2006 (when Finance Act 2006 reformed the regime) are taxed as relevant property trusts unless they are "immediate post-death interests" (IPDI) or "transitional serial interests" (TSI) - both of which preserve the old pre-2006 treatment of being inside the life tenant's estate.

Discretionary trust. Trustees have absolute discretion over which member or members of a class of potential beneficiaries receives income or capital, and when, and in what amount. No beneficiary has any fixed entitlement until the trustees exercise their discretion. The discretionary structure is the most flexible (trustees can react to family circumstances after the deed is signed) and is therefore the most heavily taxed: the RAT of 45% bites at the trust level and a separate "tax pool" mechanism tracks the trustees' historic tax payments against distribution credits.

Settlor-interested trust. Any trust where the settlor, the settlor's spouse or civil partner, or in some cases the settlor's minor unmarried children, can benefit (whether by entitlement or as a member of a discretionary class). Sections 624 to 628 ITTOIA 2005 attribute the trust income back to the settlor as if it were their own income. The settlor pays income tax at their marginal rate, but is given a credit for any tax already paid at the trust level. The anti-avoidance rule prevents the obvious tactic of "settling" income on a low-tax-rate spouse or child while retaining benefit. A trust ceases to be settlor-interested if the settlor and spouse genuinely and irrevocably exclude themselves from any future benefit - but the trust deed must be watertight.

Other trust types worth knowing. Charitable trusts (section 23 Income Tax Act 2007) enjoy broad income tax exemption and have their own Charity Commission regulatory regime. Trusts for vulnerable beneficiaries (section 30 Finance Act 2005) get a special tax election to apply the lower of trust-level tax and what the beneficiary would have paid had the income been theirs. Bereaved minors trusts and 18-25 trusts (sections 71A and 71D IHTA 1984) created by a deceased parent enjoy concessional IHT treatment. Employee Benefit Trusts and Employee Ownership Trusts have their own statutory codes (Schedule 7C TCGA 1992 and Part 5 ITEPA 2003).

3. RAT mechanics and the £500 de minimis from April 2024

The Rate Applicable to Trusts is the principal income tax rate for discretionary and accumulation trusts and sits in section 9 Income Tax Act 2007. For 2026/27 the RAT is 45% on non-dividend income (interest, rental income, trading income, other taxable receipts) and 39.35% on dividend income (the "dividend trust rate" introduced by Finance Act 2016). Both rates align with the personal additional rate so that wrapping income in a trust does not reduce the headline tax bill.

The £1000 band before April 2024. For tax years up to 2023/24 trusts had a £1,000 standard-rate band: the first £1,000 of income was taxed at basic rate (20% / 8.75%) and only income above that was taxed at the RAT. The band was reduced to £200 in 2018/19 for trusts created after 6 April 2017 where the same settlor had created multiple trusts, but otherwise sat at £1,000 for many years and meant that small family trusts paid little or no additional tax.

The April 2024 abolition. Finance (No. 2) Act 2023 abolished the £1000 band from 6 April 2024 and replaced it with a different mechanism: trusts and estates with total income for the tax year of £500 or less pay no income tax at all. The new £500 threshold is a hard de minimis, not a tax-free band - it removes micro-trusts from the tax net entirely, but once total income exceeds £500 the RAT applies to every pound from the first. The change followed an HMRC consultation that found administering tax returns for hundreds of thousands of low-income trusts and estates cost more than the tax collected. For the $2026/27 year the de minimis remains £500 and applies per trust (subject to a divisor where the same settlor created multiple trusts).

The tax pool. Where trustees of a discretionary trust make a distribution to a beneficiary, the beneficiary takes a tax credit equal to the RAT (45% non-dividend, 39.35% dividend) on the grossed-up amount. The trustees maintain a running "tax pool" of all the tax they have paid at the RAT across all sources, and the distribution credit comes out of that pool. If distributions exceed the pool the trustees must top it up by paying the shortfall to HMRC out of trust capital - the so-called "tax pool charge". This can hit when income that was taxed at a lower rate (e.g. dividends at the dividend trust rate below the RAT) is then distributed with a full RAT credit. Modern trust accounting software tracks the pool automatically; lay trustees frequently get caught out by it.

Beneficiary side. A non-taxpayer beneficiary (e.g. a student with no other income) can reclaim the full RAT tax credit from HMRC by filing a Self Assessment return and form R185 (Trust Income). A basic-rate beneficiary can reclaim the difference between the RAT and their basic rate (45% - 20% = 25 percentage points). A higher-rate beneficiary pays an extra 5 percentage points (40% - 45% = negative, so actually a refund if the RAT exceeds their marginal rate by 5pp). The R185 is the only acceptable proof of the tax credit; trustees must issue one for every income distribution made in the tax year.

4. CGT for trusts: £1,500 AEA and the 24% flat rate

Trust CGT rate. From 30 October 2024 (Autumn Budget 2024) trusts pay capital gains tax at a flat 24% on every class of gain. Before that date trusts paid 28% on residential property and carried interest gains and 20% on other gains; the reform aligned the trust rate with the new higher individual CGT rate and simplified the regime. The 24% rate applies to disposals on or after 30 October 2024; disposals straddling the date are split by reference to the contract date in the usual way.

Trust annual exempt amount. For 2026/27 the trust AEA is £1,500 - exactly half of the £3,000 individual AEA, a long-standing relativity in section 3 TCGA 1992. Where the same settlor has created multiple trusts, the £1,500 is divided pro-rata between them with a statutory floor of £300 each, so any group of five or more "associated" trusts created by the same settlor end up with £300 of AEA each.

Hold-over relief. Where assets are transferred into or out of a relevant property trust, hold-over relief under section 260 TCGA 1992 can defer the CGT on the disposal: the gain is rolled into the base cost of the asset in the hands of the trustees (on transfer in) or the beneficiary (on transfer out). Hold-over relief requires a joint election by the transferor and the trustees and is unavailable for settlor-interested trusts. Section 165 TCGA 1992 provides a separate hold-over relief for gifts of business assets (regardless of whether the recipient is a trust). Hold-over relief converts an immediate CGT cost into a future CGT cost when the trust or beneficiary eventually disposes of the asset.

Bare and IIP trusts. A bare trust is CGT-transparent: gains belong to the beneficiary, who uses their personal £3,000 AEA and individual rates (24% higher / 18% basic on residential property from 6 April 2024; lower rates on other gains had been pushed up under the same reform). IIP trustees pay trust-level CGT at 24% using the £1,500 trust AEA; gains do not flow to the life tenant for CGT purposes (only income does). Distributions of capital from an IIP trust to a remainder beneficiary may themselves be a CGT disposal by the trustees, often relieved under section 71 TCGA 1992 where the beneficiary becomes absolutely entitled.

5. IHT: 20% entry, 10-year periodic, exit charges

The inheritance tax treatment of relevant property trusts (the IHT umbrella term for discretionary and most post-2006 IIP trusts) is the most complex layer of UK trust tax. The regime is designed to mimic the 40% death rate that would have applied if the assets had stayed in an individual estate, spread across the trust's life via an entry charge, a periodic charge every ten years, and exit charges when property leaves the trust.

Entry charge (20% CLT). A lifetime gift into a relevant property trust is a chargeable lifetime transfer (CLT). To the extent the gift exceeds the available nil-rate band (£325,000 for 2026/27, less any CLTs in the previous 7 years), it suffers an immediate 20% IHT charge. The settlor can elect for the trustees to pay the charge from trust assets, or can pay it personally - if paid personally the "grossing up" rule increases the effective rate to 25% because the tax itself is also chargeable. If the settlor dies within 7 years of the CLT, the gift is reassessed at the full 40% death rate with credit for the lifetime 20% already paid; taper relief reduces the additional charge on a sliding scale.

10-year periodic charge. Every ten years from the creation date the trust is revalued and the value above the available NRB at the anniversary date is charged at an effective rate of up to 6% (30% × the lifetime rate of 20%). The precise rate is calculated by a long-form formula in sections 64 and 66 IHTA 1984: the trust value minus the relevant NRB gives the "relevant amount"; the lifetime IHT rate is applied; the result is multiplied by 30% to give the effective periodic rate; that rate is then applied to the actual trust value at the anniversary. For a trust worth less than the NRB the rate is 0; for a trust worth substantially more the cap is 6%. The NRB used is the one current at the anniversary, with any CLTs made by the same settlor in the 7 years before the trust was created reducing the available band.

Exit charges. When property leaves the trust between ten-year anniversaries (either by distribution to a beneficiary or by termination of the trust) an exit charge applies. The charge is the same effective rate as the most recent periodic charge, pro-rated by the number of complete quarters since that anniversary divided by 40 (i.e. by the proportion of the next 10-year cycle that has been completed at the date of exit). For an exit in the first ten years the charge uses a notional periodic rate based on the original CLT value. Exit charges can therefore be very small in the early years of a cycle and approach the full 6% in year 10.

Available reliefs. Business Property Relief and Agricultural Property Relief can apply to qualifying assets held in trust, subject to the 2-year holding period and (from April 2026) the new £1m combined cap on the 100% rate. The spouse exemption does not apply to trust transfers because trustees are not the deceased's spouse. The charity exemption applies to outright trust distributions to a qualifying charity. Excluded property (broadly, non-UK assets of a non-long-term-resident settlor) is outside the IHT regime entirely, though the non-dom reform from 6 April 2025 has tightened the test substantially.

Pre-22 March 2006 IIP trusts. IIP trusts created before the Finance Act 2006 cut-off sit outside the relevant property regime: the value is included in the life tenant's estate for IHT on their death, taxed at the headline 40% rate (subject to the life tenant's own NRB and reliefs). This is sometimes called the "qualifying interest in possession" (QIIP) regime and is the original pre-Finance Act 2006 design that the relevant property regime replaced for new IIP trusts.

6. R185 and beneficiary reporting

Every time trustees make a distribution of income to a beneficiary they must issue form R185. There are three variants. R185 (Trust Income) is for distributions from IIP and discretionary trusts and is the form most beneficiaries will see. R185 (Estate Income) is for distributions from a deceased person's estate during the administration period (after death, before estate windup). R185 (Settlor) is used where income is attributed back to the settlor under the settlor-interested rules and the trustees need to certify the attribution.

What the R185 shows. The form lists each category of income (non-savings, savings, dividend) with the gross amount, the tax already paid by the trustees, and the net amount paid to the beneficiary. The tax credit is the RAT (45% non-dividend, 39.35% dividend) for discretionary trust distributions regardless of the actual rate the trustees paid - this is what triggers the tax pool mechanism, because a dividend received by the trust is taxed at 39.35% but distributed with a 45% credit, leaving a notional shortfall the trustees must top up.

Beneficiary reporting. The beneficiary enters the R185 figures on the SA107 supplementary page of their Self Assessment return (Trust pages). Non-UK resident beneficiaries may be entitled to a tax treaty refund on the trustees' UK tax under the relevant double-tax agreement. Vulnerable beneficiaries can have the trust income taxed as if it were their own under the section 30 Finance Act 2005 election, potentially reducing the rate below the RAT. The beneficiary's filing deadline is the standard 31 January following the end of the tax year; trustees should issue R185s in good time, conventionally by 31 October following the tax year end.

Capital distributions. Capital distributions from a discretionary trust do not carry an income tax R185; they may trigger an IHT exit charge (above) and a CGT event (above), but for the beneficiary the receipt is generally not taxable as income. Where a distribution mixes income and capital the trustees must apportion it on a reasonable basis - a common point of HMRC enquiry.

7. Trust Registration Service registration

The Trust Registration Service is HMRC's online register of UK and certain non-UK trusts. It was launched in 2017 to implement the EU Fourth Money Laundering Directive and was expanded substantially in 2022 under the Fifth Directive to cover non-tax-liable express trusts. The register is shared with law enforcement and (since 2022) with parties with a "legitimate interest" in identifying trust beneficial owners.

Who must register. All UK express trusts must register on the TRS within 90 days of creation, even if the trust has no UK tax liability. An express trust is one deliberately created by the settlor (the vast majority of family trusts); resulting trusts and constructive trusts that arise by operation of law are generally excluded. Trusts that have a UK tax liability (income tax, CGT, IHT, SDLT, LBTT, LTT, or stamp duty) must register regardless of express status and must also keep the register up to date annually.

Excluded trusts. A number of trusts are excluded by the regulations, including: trusts of pure life insurance policies, bare trusts holding only jointly-owned UK property between the same legal owners, trusts created by will that wind up within 2 years of death, registered pension scheme trusts, charitable trusts on the Charity Commission register, and certain statutory trusts (e.g. bereaved minor trusts under the will of a parent). The exclusions are narrow and the burden is on the trustees to satisfy themselves the trust qualifies.

What must be registered. Trustees must provide details of the trust (name, creation date, governing law, lead trustee), the settlor (name, date of birth, nationality, residence), each trustee, each named beneficiary or class of beneficiaries, any protector, and details of UK assets and any UK tax liabilities. Personal details are protected by the "legitimate interest" gateway: only law enforcement, regulated AML-supervised entities, and journalists with a public-interest case can access them.

Penalties. Failure to register or update on the TRS attracts HMRC penalties of up to £5,000 per offence on a discretionary basis: first offence is often penalty-free, repeat offences scale to the headline figure. The discretionary penalty is in addition to any criminal liability under the Money Laundering Regulations 2017 for serious or persistent breach. Trustees are personally liable for compliance, even where a professional administrator has been engaged.

8. Family Investment Company alternative

A Family Investment Company (FIC) is a UK private limited company used as an alternative to a discretionary trust for holding family investment wealth. FICs gained prominence after the 2006 trust reforms made discretionary trusts substantially less tax-efficient for large estates; HMRC set up a dedicated FIC research unit in 2019 and concluded in 2021 that FICs were not used aggressively for tax avoidance, removing some of the speculative tax risk that had previously deterred them.

FIC tax mechanics. Income inside the FIC is taxed at corporation tax rates (25% main rate or 19% small profits rate for 2026/27). Dividend income received by a UK company from another company is generally exempt from corporation tax under the Schedule 5AAA dividend exemption (section 931A-931W Corporation Tax Act 2009). Capital gains on investment assets are taxed at the main corporation tax rate. Compared to the 45% RAT in a trust, the corporation tax rate is substantially lower for retained income - which is the FIC's structural advantage.

Extraction layer. The downside is the second layer of tax when cash leaves the FIC. Dividends paid to shareholder family members are taxed at the personal dividend rate (up to 39.35%); share sales are taxed at the personal CGT rate (up to 24% for 2026/27 after the Autumn 2024 reform). The total combined rate (corporation tax + dividend tax or CGT) is broadly similar to the RAT-plus-pool treatment of a discretionary trust, so the FIC's edge is principally in long-term retained accumulation rather than current distribution.

Share structures. A typical FIC issues "founder" voting shares held by parents, "growth" or "alphabet" shares with no value at issue but participating in future capital growth held by children, and possibly "freezer" shares with fixed capital rights held by parents. The growth shares direct future appreciation to the next generation without an immediate IHT gift, and the founder voting shares retain control. The Family Investment Company structure is most often paired with a small discretionary trust holding the founder shares, to preserve flexibility on the next-generation transfer.

When a FIC makes sense. FICs are typically used for investment portfolios of £2m to £10m+ where the corporation tax saving on retained income outweighs the extraction-layer cost. They are also used where the family wants the next generation to acquire growth-share rights at low values, mirroring the "growth share" technique that has long been used in private-equity and management buy-out structures. They are not a panacea: the IHT planning often still requires a parallel trust, and the corporation tax profile of investment income (especially close investment-holding companies under section 18A Corporation Tax Act 2010) needs specialist advice.

9. Bare trusts for children and the £100 rule

The bare trust is the standard vehicle for an absolute gift to a minor. The donor transfers cash or investments to a trustee (commonly the donor or another relative) who holds them on bare trust until the beneficiary reaches 18 (16 in Scotland). For tax purposes the income and gains belong to the child: the child's personal allowance (£12,570 for 2026/27), starting rate for savings (£5,000), personal savings allowance (£1,000 basic-rate), dividend allowance (£500), and £3,000 CGT AEA can all be used to shelter investment returns.

The £100 parental settlement rule. Section 629 ITTOIA 2005 sets an anti-avoidance limit: where a parent settles assets on their unmarried minor child and the income arising from those settled assets exceeds £100 per child per parent per tax year, all of that income (not just the excess) is taxed on the parent at their marginal rate. The £100 threshold is a cliff-edge: £101 of income from £5,000 of parental gifts is taxed entirely on the parent. The rule exists to stop parents using their child's personal allowance to shelter family investment income; it does not affect transfers from grandparents, godparents, siblings, or any other adult.

Capital is unaffected. The £100 rule attributes only income, not capital. A parental gift onto bare trust that produces a capital gain rather than income (e.g. a growth-stock investment that pays no dividend until the child turns 18) is unaffected; the gain is the child's. The rule also lapses when the child turns 18 - all post-majority income is the child's regardless of who originally gifted the underlying capital.

Junior ISA carve-out. Junior ISAs are statutorily exempt from the £100 rule under section 695A ITTOIA 2005 and the ISA Regulations 1998. For 2026/27 the Junior ISA annual subscription limit is £9,000 per child and can be made up of any combination of cash JISA and stocks-and-shares JISA. The JISA is the default route for parental giving to children precisely because it sidesteps the £100 cliff. Grandparental giving has more flexibility because the grandparent is not a parent and the £100 rule does not bite - hence the common pattern of grandparents funding bare trusts for grandchildren and parents funding JISAs.

18-25 trusts and bereaved minor trusts. Where the settlor is a deceased parent and the trust is for a bereaved minor child, the section 71A IHTA 1984 regime gives concessional IHT treatment: no periodic or exit charges, provided the capital vests absolutely by age 18. Section 71D extends similar treatment to "18-25 trusts" that delay absolute vesting until age 25. Both are commonly used in parental wills to provide for under-age children; neither is available for a living-parent settlement.

10. Three worked examples

The figures below are illustrative and follow the 2026/27 rates and thresholds set out in this guide. They are general examples only - real trust tax calculations turn on the exact deed wording, the source of income, the tax history of the settlor, and a stack of other facts that need specialist review.

Example A: small discretionary trust with rental income

A discretionary trust holds a small buy-to-let property and receives net rental income of £4,000 in 2026/27 after allowable expenses. The trust has no other income. Under the post-April-2024 regime the first £500 is taxed at the basic rate of 20% (£100) and the remaining £3,500 is taxed at the RAT of 45% (£1575). Total trust tax for the year is £1675. If the trustees later distribute the net rent to an adult beneficiary, they issue an R185 showing a £4,000 gross distribution with a 45% tax credit. A non-taxpayer beneficiary can reclaim the full credit; a basic-rate beneficiary reclaims 25 percentage points (the gap between the RAT and their 20% marginal rate); a higher-rate beneficiary reclaims 5 percentage points; an additional-rate beneficiary pays no extra. Note the tax pool asymmetry: the trustees actually paid £1675 but certify a £1800 credit on the R185, leaving a shortfall to be topped up if the full distribution is made.

Example B: IIP trust paying income to a life tenant

An interest-in-possession trust holds bond investments and receives £20,000 of taxable savings income in 2026/27. The life tenant is the settlor's widowed mother, who has no other income. The trustees pay basic-rate tax at 20% on the savings income: £4000. Net income of £16000 is mandated to the life tenant. The life tenant grosses up the receipt back to £20,000 on her own Self Assessment return, claims a £4000 tax credit for the trustees' tax, and applies her £12,570 personal allowance plus £5,000 starting rate for savings plus £1,000 personal savings allowance to the gross amount. The result is a substantial refund to the life tenant of trustee tax that was paid on income that her personal allowances would have sheltered. The IHT treatment depends on whether the IIP was created before or after 22 March 2006 - this example assumes a post-2006 trust caught by the relevant property regime.

Example C: 10-year periodic charge on a £800k discretionary trust

A discretionary trust was created by the settlor in 2016 with an initial £400,000 of investment assets (no CLTs in the previous 7 years). By the 10-year anniversary in 2026 the trust value has grown to £800,000. The available nil-rate band at the anniversary is £325,000. The relevant amount is the value above the NRB: £475,000. The effective periodic rate is calculated as the relevant amount divided by the trust value, multiplied by the maximum 6% rate: £475,000 ÷ £800,000 × 6% = 3.56%. Applied to the trust value the 10-year periodic charge is £28500 (rounded). If the trustees later make a distribution of £100,000 to a beneficiary in year 12, an exit charge applies at the same effective rate pro-rated by 8 complete quarters since the anniversary out of 40 (i.e. 20% of the periodic rate), giving an additional exit charge of approximately £713. The full IHT mechanism is more nuanced (it interacts with CLTs by the same settlor before the trust, with added property since the last anniversary, and with available reliefs), but the pattern - small effective rates for trusts modestly above the NRB, approaching the 6% cap for very large trusts - holds throughout.

11. Frequently asked questions

12. Related calculators and guides

UK trust tax interacts with most other areas of the personal tax code. For readers building a full picture the most relevant cross-references on SalaryTax are:

• UK inheritance tax rules guide - the broader IHT framework that the 20% entry, 10-year periodic and exit charges sit inside.
• IHT 7-year gift taper calculator - models PETs and CLTs by a single settlor, including chargeable lifetime transfers into trust.
• Inheritance Tax calculator - models an estate including settled property and pre-death CLTs.
• UK Capital Gains Tax rules guide - sister piece covering the 24% trust CGT rate and £1,500 trust AEA.
• Capital Gains Tax calculator - models a gain at the individual or trust rate.
• Dividend tax calculator - models the personal dividend rates that a beneficiary or FIC shareholder pays on extracted distributions.
• UK Corporation Tax rates guide - the FIC corporation tax layer at 25% main rate or 19% small profits rate.
• EIS and SEIS deep-dive - Business Relief on EIS and SEIS shares interacts with trust IHT charges.
• Business Asset Disposal Relief guide - BADR on trust disposals where the beneficiary qualifies.
• UK landlord tax guide - rental income in a trust suffers the RAT rather than personal rates; commonly relevant to Example A above.
• UK residence (SRT) guide - non-resident trustees and the post-April 2025 long-term resident test for IHT scope.
• Pension tax relief guide - registered pension scheme trusts are outside the TRS and the relevant property regime.
• High earner tax planning checklist - the broader context where trust planning typically sits for UK higher-rate taxpayers.
• UK tax relief guide - companion piece covering every relief mechanism in 2026/27.
• How UK tax works - primer on the income tax, CGT and IHT machinery these rules sit inside.

Sources: gov.uk Trusts and taxes overview, gov.uk Types of trust, gov.uk Trustees' tax responsibilities, gov.uk Trusts and Capital Gains Tax, gov.uk Trusts and Inheritance Tax, gov.uk Parental trusts for children, gov.uk Trust Registration Service, HMRC Trusts, Settlements and Estates Manual (TSEM), gov.uk Autumn Budget 2024 Overview of Tax Legislation and Rates (OOTLAR), and gov.uk Income Tax: Low Income Trusts and Estates. All figures retrieved 2026-05-27 and apply to 2026/27 unless explicitly stated otherwise. This guide is general information based on published HMRC and gov.uk material, not legal or tax advice for any individual trust. Anyone creating, administering, or distributing from a UK trust should consult a Chartered Tax Adviser (CTA) or STEP-qualified trust practitioner on their own facts before making any decisions.