Tax Authority or Taxation Authority meaning

See Q&A: At what point does income from a trust become accumulated and capital in nature, so that payments of the same funds are capital and the beneficiary cannot claim income tax back at their marginal rate? For present purposes, assume the trust is discretionary and that nobody has an interest in possession in its income. Accumulation denotes the transformation of income into capital; once that has happened, any later payments out of those same sums are treated as capital, and the beneficiary cannot reclaim income tax at their marginal rate. For income to be properly accumulated, certain requirements must be met: there must exist a power or trust to accumulate, granted by the trust instrument or under the Trustee Act 1925 (TA 1925), or possibly arising at common law—see Lombe v Stoughton (1841) 12 Sim 304 (not reported by LexisNexis®UK) There is also statutory authority to accumulate income from funds held for a beneficiary who is a minor, to the extent...

In this issue: Court of Protection Elderly and vulnerable clients UK taxation for Private Client HMRC Manuals updates Tax avoidance, evasion and non-compliance Family businesses and ownership structures Digital assets and cryptoassets Pensions, insurance and tax-efficient investments Scotland, Wales and Northern Ireland International Question of the week Additional Private Client updates this week Daily and weekly news alerts LexTalk®Private Client: a Lexis+® community New and updated content Dates for your diary Trackers Latest Q&As Useful information Court of Protection Court of Protection upholds District Judge’s refusal of application for non-disclosure of medical and health records (P (by his litigation friend, the Official Solicitor) v Manchester City Council) Here, the local authority—supported by the Integrated Care Board (ICB) and the Foundation Trust—sought a closed material order to prevent disclosure of P’s medical and health records to his mother, with whom he lived. The applicants maintained...

In this issue: Probate Powers of attorney and advance decisions Court of Protection UK taxes for Private Client HMRC Manuals updates Insolvency—Private Client Contentious trusts and estates Scotland, Wales and Northern Ireland International Question of the week Daily and weekly news alerts LexTalk®Private Client: a Lexis+® community New and updated content Dates for your diary Trackers Latest Q&As Useful information Probate Amendments to Non-Contentious Probate Rules 1987 in force 3 November 2025 As noted in Private Client weekly highlights—11 September 2025—Probate, the Non‑Contentious Probate (Amendment) Rules 2025, SI 2025/1004 take effect on 3 November 2025. They revise the Non‑Contentious Probate Rules 1987 (NCPR 1987), SI 1987/2024, including to reflect that applications by trust corporations must now be made via the online portal. The changes also modify NCPR 1987/2024, r 27 to introduce an order of priority where individuals of the same degree contest entitlement to a...

General principles The trustees are, for tax purposes, regarded collectively as a single person, distinct from the individuals who serve as trustees from time to time. An interest in possession (IIP) means a beneficiary has an immediate right to the trust income as it arises. That income belongs to the beneficiary, and the trustees lack authority to retain it, save to meet proper expenses. Where trust income does not fall within the definition of accumulated or discretionary income in section 480 of the Income Tax Act 2007 (ITA 2007), it is treated as the income of ‘other persons’ and taxed at the basic and dividend rates. Ultimately, the income is assessed on the beneficiary at their personal rates, irrespective of when, and even whether, it is actually paid to them. Nevertheless, the trustees are liable to income tax on income arising from trust property because they are the legal owners of that property and thus the persons who receive the income. The way IIP and discretionary trusts are differentiated...

Double tax treaties (DTTs) Double tax treaties (DTTs) are founded on the idea that members of a multinational group are charged tax as if they were independent, dealing with one another at arm’s length. To apply the separate entity concept correctly, DTTs allow jurisdictions to amend a group company’s profits so that any outcomes arising from particular conditions or relationships are removed for tax purposes. This is referred to as the ‘arm’s length principle’. Under Article 9 of the Organisation for Economic Co-Operation and Development (OECD) model tax convention (OECD MTC) and the UN model tax convention (UN MTC), contracting states may recalibrate the taxable income of ‘associated enterprises’ when their transactions are not conducted on arm’s length terms. The 2025 revised commentary to Article 9 of the OECD MTC makes clear that, when adjusting an associated enterprise’s taxable profits, a tax authority ought to apply the OECD’s Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (2022) (OECD TPG), which set out comprehensive guidance on the arm’s length...

Employee share scheme participants and shareholders This Practice Note considers the matters that arise on the death of a participant in both HMRC tax-advantaged schemes and a range of unapproved share scheme arrangements. It also examines the practical points connected with the death of an employee shareholder who may have obtained shares under those arrangements. Market practice Early Vesting As a matter of market practice, in most employee share plans, death is ordinarily treated as a 'good leaver' event (see Practice Note: Drafting leaver provisions in share plans—Different treatment for different types of leavers). This typically results in accelerated vesting or the ability to exercise awards being triggered. Where that applies, and the relevant scheme is an option plan, the deceased participant’s personal representatives are permitted to exercise options within a defined window (commonly 12 months after death). Likewise, options already vested will generally have to be exercised within a specified timeframe from the date of death, failing which they will lapse and cannot be exercised...

How should the trustees report the amount of the debt for the purposes of IHT ten-year charge? Should they include any index-linked element of the debt? We have found no authority directly answering this. The principal, or ten‑year, charge is imposed on the value of relevant property held by the trustees immediately before the ten‑year anniversary (TYA). See Practice Note: Relevant property trusts—the principal (ten‑year) charge. Where the trustees’ asset is encumbered by a charge with an index‑linked feature, the trust fund must be valued correctly just before the TYA. That exercise turns on the precise balance outstanding at that point and on whether the index‑linkage ought to be reflected, notwithstanding it would only bite once the loan is redeemed. As a broad rule, where property is charged, the amount secured is deductible from the property’s value when computing the IHT charge (section 5(3) and sections 162–166 of the Inheritance Tax Act 1984 (IHTA 1984)). There are, however, limited departures from that general position. Consequently, the amount to be...