Trusts
Deduction of tax at source may apply depending upon the type of trust and where the investment is held. But it can only apply where money is held in a separate designated client account. The income of trusts where none of the beneficiaries is ordinarily resident in the U.K. will not be subject to deduction of tax at source, even if a separate designated client account is used, provided that the appropriate declaration has been made.
Administration of estates
Interest on money held for U.K. resident personal representatives will, if placed in a separate designated client account, be subject to deduction of tax at source unless a declaration is made by the solicitor or the personal representatives that the deceased was not resident in the U.K. immediately before his death.
AIDE-MEMOIRE OF NORMAL SITUATIONS
| Type of account | Payment of interest by bank or building society | Consequences |
| A
Designated - where subject to tax deduction |
Net | Pay net to client, who gets basic rate tax credit. No further tax deductions form residents (unlesss solicitor is assessable as an agent) |
| B
Designated - where paid gross (client money generally) |
Gross | Pay gross to client who is assessable on payment as gross income. No deduction of tax for non-residents (unless the solicitor is assessable as an agent). |
| C
Bank and building society general client account - always paid gross (client money generally and stake money) |
Gross | Pay gross to client who in turn is assessable on payment as gross income; in practice solicitor assessed on interest after setting-off this payment. No deduction of tax for non residents. |
4th March 1992, revised February 1999
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