Income Tax for Trusts and Estates
Income tax charges, deductions, allowances and rates for trusts, estates and beneficiaries.
How to study the ATT Qualification
Use Finance Act 2025 for the 2026 tax papers, complete the three foundational CBEs early, apply professional ethics throughout and concentrate option practice on the one paper you will enter.
Core concepts
Concept 1
Income tax treatment depends on trust type, estate administration and who is entitled to income.
Exam cue: Classify the arrangement and taxpayer before calculating.
Concept 2
Trustees or personal representatives may pay tax before distributions create beneficiary consequences.
Exam cue: Separate income received, tax paid and amounts distributed.
Concept 3
Rates, allowances and deductions differ from individual rules.
Exam cue: Trace any tax credit or beneficiary reporting consequence.
Risk pitfalls and guardrails
Using personal allowances automatically for trustees.
Guardrail: Do not use an obsolete tax rate, assume a relief, ignore legal form, submit unsupported information or omit the relevant deadline and ethical response.
Taxing the same income twice without credit.
Guardrail: Do not use an obsolete tax rate, assume a relief, ignore legal form, submit unsupported information or omit the relevant deadline and ethical response.
Ignoring the type of trust or estate stage.
Guardrail: Do not use an obsolete tax rate, assume a relief, ignore legal form, submit unsupported information or omit the relevant deadline and ethical response.
Memory anchors
Trust type
Bare, interest-in-possession and discretionary structures have different consequences.
Estate period
Personal representatives deal with income during administration.
Trustee charge
Calculate trustee income and tax under the applicable trust rules.
Distribution
Track gross amount, tax credit and beneficiary treatment.
Records
Reconcile receipts, tax paid and statements to beneficiaries.
Checkpoint rule
Do the check-up only after you can summarize each concept in one sentence and identify one dangerous pitfall from memory.
Knowledge Check (after reading)
Short check-up to confirm understanding of this module.
Check-up Questions
A discretionary trust receives £10,000 bank interest in 2025/26. Ignoring the £500 de minimis amount and expenses, the trust rate is 45%. What income tax arises?
A discretionary trust receives £8,000 dividends and the trust dividend rate is 39.35%. Ignoring the de minimis amount, what tax is due?
Answer all questions to submit.
Next step personalized recommendations
Continue learning
Move forward only after this module is stable.
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