Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Trust definition

What does Trust mean? A trust is a legal arrangement in which one or more trustees hold and manage property (the trust property) for the benefit of beneficiaries. It is primarily defined by case law rather than a single statute, though key rules appear in legislation (for example, writing requirements and trustee powers). Trusts arise by express declaration (usually by a settlor), by operation of law (resulting or constructive trusts), or under statute, and are used in private client, commercial, pension and charitable contexts. Core features include: the trustee’s fiduciary duties to act loyally, prudently and in accordance with the trust terms; control...

Discretionary and accumulating trusts: UK income tax pool—components, calculation, distribution credits, shortfall charges and management strategies

Published by a LexisNexis Private Client expert

Practice notes

For an interest in possession beneficiary, the trust works as a channel through which income flows, keeping its nature and tax treatment for tax purposes. interest arrives gross; tax is settled by the trustees and appears as net interest for the life tenant in their hands. Likewise, dividends come in gross and the trustees pay the tax, unless the income is mandated directly to the life tenant. This ‘look‑through’ approach acknowledges that the beneficiary is entitled to income as it arises. By contrast, a discretionary beneficiary has no entitlement to the trust’s income until the trustees choose to distribute it. There is no prescribed mechanism to align a payment with income received by the trustees in any period. Therefore, the beneficiary cannot ‘look through’ the trust to the original source of that income. The same applies where the trustees simply hold a power to accumulate income instead of paying it out, even if that power is not exercised. When income is paid to a beneficiary whose entitlement depends on the trustees’ discretion, it is treated as received net of tax at the trust rate. The beneficiary receives a credit under that treatment for the amount distributed to them as such...

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Web page updated on 21/05/2026

Popular documents

Using the Judicial College Guidelines to assess general damages in personal injury claims

When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...

Tomlin orders in England and Wales: CPR guidance on drafting, confidentiality, approval, variation, enforcement, limitation, CCA issues, court-specific requirements, sample wording and precedents

This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...

Precedent: Deed of Surrender of Lease with Optional Premium, Settlement and Release, Landlord, Mortgagee and Guarantor Consents, Reimbursement and HM Land Registry Provisions (England and Wales)

Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...

Precedent Statutory Declaration: Standard Wording under the Statutory Declarations Act 1835

I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...