In the Spring Budget Jeremy Hunt announced tax changes to simplify the administration of trusts and estates.

    At the moment, for accumulation and discretionary trusts, the trust rate (45%) and dividend trust rate (39.35%) of tax doesn’t apply to the first £1,000 slice of income for a tax year. Instead the basic rate of 20% and basic dividend rate of 8.75% apply.

    However, from 6 April 2024, the £1,000 standard rate band for trusts will be removed, as will the concession where the tax liability is below £100. In its place legislation will be introduced so that where trusts and estates have income of up to £500 or less, they’ll not pay income tax.

    Although the changes are minor – and it’s debatable whether they will truly simplify – they’re expected to affect an estimated 37,000 people each year who are beneficiaries of trusts or estates.

    To help you navigate related conversations with your clients, our latest Tech Talk covers:

    • The current tax position
    • The changes planned and when they’ll begin
    • Who will be impacted

    Take a look at the guide here.

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