TSEM1565 - Introduction to trusts: types of trust: accumulation/discretionary trust
Use of term ‘accumulation/discretionary trust’
We use the term ‘accumulation/discretionary trust’ to describe any trust where the trustees can accumulate income or pay it at their discretion. This includes
- trusts to accumulate (TSEM1566)
- trusts where the trustees can pay income at discretion
- accumulation and maintenance trusts (TSEM1567)
- some mixed trusts (TSEM1569)
Tax consequences
Where the trustees have power to
- accumulate income or
- pay income at discretion or
- accumulate income and pay income at discretion
the trust’s income is chargeable at special rates of tax under ITA/S479. See TSEM3010+.
From April 2023 the special trust rates are:-
- 39.35% on dividend type income
- 45% on all other income
For earlier years see TSEM3041.