Legal Guidance and Research / Experts / Jordan Ellis
Jordan Ellis#6005
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Jordan Ellis

Stephenson Harwood
Jordan is a Partner at Stephenson Harwood within the Private Wealth department based in Dubai. Jordan advises on all aspects of both traditional and International private client work, cross-border tax and succession planning.

Practice Area

Panel

  • Contributing Author

Qualified Year

  • 2015

Membership

  • STEP Arabia

Education

  • Society of Trusts and Estates Practitioners (STEP) student member (2017)
  • Qualified as a Solicitor in England And Wales (2015)
  • Legal Practice Course, The City Law School (2013)
  • Graduate Diploma in Law, The City Law School (2012)
  • Geography BA, Upper Second Class Hons, University College London (2011)

1 Contributions by Jordan Ellis

UK income tax for life tenants of interest in possession trusts: liability, trustee basic rate deductions, mandated income, annuities, expenses, timing and HMRC reporting
PRACTICE NOTES
UK income tax for life tenants of interest in possession trusts: liability, trustee basic rate deductions, mandated income, annuities, expenses, timing and HMRC reporting
In general terms, a life tenant has the right to the income generated by an interest in possession (IIP) trust, and that income is charged to tax at the life tenant’s marginal rates. This applies whether the trustees collect the income and remit it to the life tenant, or where the income is ‘mandated’ so the life tenant is paid it straight from the source. While the ultimate income tax outcome is identical, the steps for reporting the income and settling any tax vary, depending on the route by which the income is received. The source of the beneficiary's income For a life tenant of an IIP trust, the income arises from the trust assets themselves, not from the enforceable right against the trustees to run the trust correctly. Consequently, for income tax, the life tenant’s income sources mirror the trust’s underlying investments as held within the trust fund. The life tenant is entitled only to trust income left after meeting trust management costs and expenses. Put simply, they are due the net income produced by the trust property, being the amount remaining once such charges have been satisfied...
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