How to File Trust & Estates Tax Return 2019/20?

Different types of trust incomes have different income tax rates. Trust includes a trustee, settlor and a beneficiary. Each type of trust is taxed differently whereas estate tax return is levied on what you pass on after your death. There are numerous items on which estate tax is levied. Few of them are cash, retirement accounts, property etc.

Filing Of Trust & Estate Tax Return

There is a deadline set by HMRC to file trust & estate tax returns. If we consider tax year 2018-19, make sure that your trust & estate tax returns will be submitted by 31st October 2019, if it is in paper form whereas the last date for filing the tax online is 31st January 2020. You can choose any method from the above two methods but important is that your documents should reach us by the relevant deadline unless you have to face penalties as well as late payment interest. After filing the returns online, you will receive an onscreen acknowledgement from HMRC that they have received your return. You must declare your trust income, gains and estate self-assessment tax return at the end of every tax year.

Methods of Filing Trust & Estate Tax Return (SA900 Form)

There are two methods to file your trust & estate tax returns –

1. Buy software and send your returns electronically or online by 31st January 2020.
2. Fill the form SA900 and send the same to HMRC by 31st October 2019.

You can also take help of an accountant to file your trust & estate tax returns. After sending your returns to HMRC, HMRC tells you how much you owe to them and you need to pay your self-assessment returns by the relevant deadline.

Read Also: Calculation Guide 2019

Penalties For Not Paying Trust & Estate Tax Returns

There are penalties imposed on the individuals for not paying trust & estate tax returns before the deadline. If you are failed to submit the trust & estate tax return, you will be charged late payment penalty of £100 from the very first day after the deadline. You must pay your tax before the deadline to avoid interest & possibly a late payment penalty.

Layout of Calculation of Trust & Estate Tax Return

Following listed columns you have to fill in the summary sheet to calculate Trust & estate tax return –

1. Stage 1 – At the first stage, you have to show all your income & deductions you have included in your trust & estate tax return and classify them into different categories which will be taxed later. All trustees and personal representatives needs to complete stage 1.
2. Stage2 – This is for Personal representatives only
3. Stage3 – This is for trustees who are taxable at the trust rate or dividend trust rate. Few incomes are chargeable at trust rate or dividend trust rate and few of them are normally taxable at basic or dividend ordinary rate only. Incomes chargeable at trust rate or dividend trust rate includes accrued income charges, gilt strips, offshore income gains, income from deeply discounted securities, income from companies purchasing their own shares and gains on life insurance policies, capital redemption policies, life annuities etc. Except of these types of incomes, you are taxable at basic or dividend ordinary rate too.
4. Stage 4 – This stage is for trustees of an unauthorized unit trust. You should complete stage 4, if you are a trustee of an unauthorized unit trust and taxable at basic rate only.
5. Stage 5 – This stage includes trustees not taxable at trust rate or dividend trust rate. It includes trustee’s taxable at basic or dividend ordinary rate only.
6. Stage 6 – This stage includes all taxes which you already deducted from your income & calculating non-payable tax credits.
7. Stage 7- In stage 7, you can make adjustments to the tax you calculated in the previous sections and you have to add capital gains tax in it. Finally, you get the figure of Trust & estate tax return.
8. Stage 8 – In the 8th stage, you have to work out what you have to pay to HMRC before 31st January 2020 or what HMRC has to pay you, if it is a refund.
9. Stage 9 – Last stage is for trustees who make discretionary payments to beneficiaries.

How DNS Helps?

DNS Associates is one of the leading UK firms with more than 10 years of experience in filing of trust & estate tax returns. Our Harrow accountants managed many trusts and estate related clients in the past. We will provide you DNS experts having great knowledge in filing trusts & estate tax returns who will advise you as well as file your tax returns to HMRC before the deadline reaches.

For free consultation, you can call our DNS accountants at 03300886686 or e-mail us at enquiry@dnsaccountants.co.uk

About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.