Overview

A

tenancy

agreement

is

a

contract

between

you

and

a

landlord

It

lets

you

live

in

a

property

as

long

as

you

pay

rent

and

follow

the

rules

It

also

sets

out

the

legal

terms

and

conditions

of

your

tenancy

It

can

be

written

down

or

oral

a

spoken

agreement

A

tenancy

can

either

be

fixed

term

running

for

a

set

period

of

time

periodic

running

on

a

week

by

week

or

month

by

month

basis

Rights

and

responsibilities

Both

you

and

your

landlord

have

certain

rights

and

responsibilities

whether

or

not

you

have

a

tenancy

agreement

Tenancy

types

Assured

shorthold

tenancies

ASTs

The

most

common

form

of

tenancy

is

an

AST

Most

new

tenancies

are

automatically

this

type

A

tenancy

can

be

an

AST

if

all

of

the

following

apply

the

property

you

rent

is

private

your

tenancy

started

on

or

after

January

the

property

is

your

main

accommodation

your

landlord

does

not

live

in

the

property

A

tenancy

can

not

be

an

AST

if

it

began

or

was

agreed

before

January

the

rent

is

more

than

a

year

the

rent

is

less

than

a

year

less

than

in

London

it

’s

a

business

tenancy

or

tenancy

of

licensed

premises

the

property

is

a

holiday

let

your

landlord

is

a

local

council

Other

tenancies

There

are

other

tenancies

that

are

not

as

common

as

ASTs

including

Excluded

tenancies

or

licences

You

may

have

an

excluded

tenancy

or

licence

if

you

lodge

with

your

landlord

and

share

rooms

with

them

like

a

kitchen

or

bathroom

You

’ll

usually

have

less

protection

from

eviction

with

this

type

of

agreement

Assured

tenancies

Tenancies

starting

between

January

and

February

may

be

assured

You

’ll

have

increased

protection

from

eviction

with

this

type

of

agreement

Regulated

tenancies

Tenancies

starting

before

January

may

be

regulated

You

’ll

have

increased

protection

from

eviction

and

can

apply

for

a

fair

rent

Shelter

has

information

on

the

different

types

of

private

tenancies

and

a

tenancy

checker

so

you

can

check

which

tenancy

you

have

What

should

be

in

a

tenancy

agreement

A

tenancy

agreement

should

include

the

names

of

all

people

involved

the

rental

price

and

how

it

’s

paid

information

on

how

and

when

the

rent

will

be

reviewed

the

deposit

amount

and

how

it

will

be

protected

details

of

when

the

deposit

can

be

fully

or

partly

withheld

for

example

to

repair

damage

you

’ve

caused

the

property

address

the

start

and

end

date

of

the

tenancy

any

tenant

or

landlord

obligations

an

outline

of

bills

you

’re

responsible

for

It

can

also

include

information

on

whether

the

tenancy

can

be

ended

early

and

how

this

can

be

done

who

’s

responsible

for

minor

repairs

other

than

those

that

the

landlord

is

legally

responsible

for

whether

the

property

can

be

let

to

someone

else

sublet

or

have

lodgers

The

terms

of

the

tenancy

must

be

fair

and

comply

with

the

law

Your

tenancy

agreement

can

not

have

anything

in

it

that

may

indirectly

discriminate

against

you

Get

legal

advice

before

signing

an

agreement

if

you

’re

unsure

of

any

terms

Once

you

’re

happy

with

it

sign

the

agreement

and

get

a

copy

of

it

Citizens

Advice

has

a

guide

on

tenancy

agreements

Changes

to

tenancy

agreements

Both

you

and

your

landlord

must

agree

in

order

to

change

the

terms

of

the

tenancy

agreement

Preventing

discrimination

You

can

not

be

discriminated

against

or

harassed

by

your

landlord

because

of

age

gender

sexual

orientation

disability

or

because

of

something

connected

with

your

disability

religion

or

belief

race

being

a

transgender

person

being

pregnant

or

having

a

baby

How

to

end

your

tenancy

Tenancies

You

can

read

the

guidance

on

moving

house

during

the

coronavirus

outbreak

Your

tenancy

agreement

should

say

how

much

notice

you

need

to

give

your

landlord

before

you

leave

the

property

You

’re

responsible

for

paying

rent

for

your

entire

fixed

term

tenancy

You

can

move

out

early

without

paying

rent

for

the

full

tenancy

if

there

is

a

break

clause

in

your

tenancy

agreement

your

landlord

agrees

to

end

the

tenancy

early

Shelter

has

information

about

ending

a

tenancy

Licence

agreements

If

your

licence

automatically

runs

out

after

a

specific

date

and

you

want

to

end

the

agreement

you

should

let

your

landlord

know

this

before

your

licence

runs

out

If

your

landlord

wants

to

end

your

tenancy

If

your

landlord

wants

you

to

leave

they

must

give

you

notice

in

a

particular

way

including

certain

information

and

warnings

This

depends

on

the

type

of

tenancy

agreement

and

its

terms

Some

rules

about

length

of

notice

have

changed

because

of

coronavirus

Assured

shorthold

tenancies

ASTs

Your

landlord

can

take

back

their

property

without

giving

any

reason

if

you

have

either

a

periodic

tenancy

a

fixed

term

tenancy

that

has

ended

To

do

this

both

of

the

following

must

apply

they

’ve

protected

your

deposit

in

a

deposit

protection

scheme

the

date

you

must

leave

is

at

least

months

after

your

original

tenancy

began

the

one

you

had

on

first

moving

in

How

much

notice

your

landlord

must

give

They

must

give

you

written

notice

that

they

want

the

property

back

notice

to

quit

They

must

give

you

months

if

they

gave

you

notice

before

March

months

if

they

gave

you

notice

between

March

and

August

months

if

they

gave

you

notice

on

or

after

August

This

change

is

because

of

coronavirus

The

notice

must

tell

you

the

date

you

have

to

leave

If

your

tenancy

started

or

was

renewed

after

October

Your

landlord

can

not

evict

you

if

they

’ve

been

served

notice

by

the

council

because

of

a

complaint

you

made

to

the

council

about

the

living

conditions

in

the

property

Your

landlord

must

also

have

given

you

a

copy

of

the

leaflet

How

to

rent

the

checklist

for

renting

in

England

an

energy

performance

certificate

a

gas

safety

certificate

In

England

they

must

use

form

to

give

you

notice

This

is

also

known

as

Notice

seeking

possession

of

a

property

let

on

an

Assured

Shorthold

Tenancy

In

Wales

they

do

not

need

to

use

form

but

must

give

you

notice

in

writing

If

you

’re

asked

to

leave

during

the

fixed

term

Your

landlord

can

only

ask

you

to

leave

during

the

fixed

term

if

they

have

certain

reasons

grounds

For

example

if

you

’re

behind

with

your

rent

payments

in

arrears

you

’ve

used

the

property

for

illegal

purposes

like

selling

drugs

you

’ve

damaged

the

property

Usually

the

notice

period

they

must

give

varies

up

to

months

If

you

were

given

notice

between

March

and

August

your

landlord

must

give

you

months

to

leave

the

property

If

you

’ve

been

given

notice

since

August

your

landlord

must

give

you

months

to

leave

You

might

have

to

leave

much

sooner

if

you

’re

evicted

using

a

section

notice

depending

on

the

reason

for

eviction

In

Wales

the

notice

period

must

be

at

least

months

for

any

notice

given

on

or

after

July

at

least

months

for

notices

relating

to

antisocial

behaviour

This

is

because

of

coronavirus

Assured

tenancies

Your

landlord

will

need

to

use

one

of

the

reasons

or

grounds

for

possession

in

the

Housing

Act

Excluded

tenancies

or

licences

You

’ll

often

have

an

excluded

tenancy

or

licence

if

you

live

with

your

landlord

as

a

lodger

and

share

rooms

with

them

Your

landlord

only

needs

to

give

reasonable

notice

to

quit

Usually

this

means

the

length

of

the

rental

payment

period

so

if

you

pay

rent

monthly

you

’ll

get

one

month

’s

notice

The

notice

does

not

have

to

be

in

writing

Non

excluded

tenancy

or

licence

Your

landlord

can

end

the

let

at

any

time

by

serving

a

written

notice

to

quit

The

notice

period

will

depend

on

the

tenancy

or

agreement

but

is

often

at

least

weeks

Break

clauses

If

there

’s

a

break

clause

in

the

tenancy

agreement

your

landlord

can

give

you

notice

after

this

However

your

landlord

does

not

have

a

guaranteed

right

to

possession

during

the

first

months

of

the

tenancy

If

you

do

not

leave

the

property

Your

landlord

can

not

remove

you

by

force

If

the

notice

period

expires

and

you

do

not

leave

the

property

your

landlord

may

start

the

process

of

eviction

through

the

courts


What

you

pay

it

on

You

may

have

to

pay

Capital

Gains

Tax

if

you

make

a

profit

gain

when

you

sell

or

dispose

of

property

that

’s

not

your

home

for

example

buy

to

let

properties

business

premises

land

inherited

property

There

are

different

rules

if

you

sell

your

home

live

abroad

are

a

company

registered

abroad

You

’ll

need

to

work

out

your

gain

to

find

out

whether

you

need

to

pay

tax

This

guide

is

also

available

in

Welsh

Cymraeg

When

you

do

not

pay

You

do

not

usually

need

to

pay

tax

on

gifts

to

your

husband

wife

civil

partner

or

a

charity

You

may

get

tax

relief

if

the

property

is

a

business

asset

If

the

property

was

occupied

by

a

dependent

relative

you

may

not

have

to

pay

Find

out

more

in

the

guidance

on

Private

Residence

Relief

If

you

need

to

pay

You

must

report

and

pay

any

Capital

Gains

Tax

on

most

sales

of

UK

property

within

days

Work

out

your

gain

Your

gain

is

usually

the

difference

between

what

you

paid

for

your

property

and

the

amount

you

got

when

you

sold

or

disposed

of

it

If

your

combined

capital

gains

are

over

your

allowance

for

the

year

you

’ll

have

to

report

and

pay

Capital

Gains

Tax

Market

value

In

some

situations

you

should

use

the

market

value

of

the

property

when

working

out

your

gain

Do

this

if

it

was

a

gift

there

are

different

rules

if

it

was

to

your

spouse

civil

partner

or

a

charity

you

sold

it

for

less

than

it

was

worth

to

help

the

buyer

you

inherited

it

and

do

not

know

the

Inheritance

Tax

value

you

owned

it

before

April

Selling

in

special

circumstances

There

are

special

rules

for

calculating

your

gain

if

you

live

abroad

you

sell

a

lease

or

part

of

your

land

your

property

is

compulsorily

purchased

Jointly

owned

property

If

you

own

property

jointly

with

other

people

work

out

the

gain

for

the

share

that

you

own

Deduct

costs

You

can

deduct

costs

of

buying

selling

or

improving

your

property

from

your

gain

These

include

estate

agents

and

solicitors

fees

costs

of

improvement

works

for

example

for

an

extension

normal

maintenance

costs

such

as

decorating

do

not

count

Reliefs

You

may

get

tax

relief

if

the

property

was

your

home

a

business

asset

occupied

by

a

dependent

relative

find

out

more

in

the

guidance

on

Private

Residence

Relief

Work

out

if

you

need

to

pay

Once

you

know

what

your

gain

on

the

property

is

you

can

calculate

if

you

need

to

report

and

pay

Capital

Gains

Tax

You

can

not

use

the

calculator

if

you

sold

land

sold

business

premises

sold

other

chargeable

assets

in

the

tax

year

for

example

shares

reduced

your

share

of

a

property

that

you

still

jointly

own

claim

any

reliefs

other

than

Private

Residence

Relief

or

Letting

Relief

are

a

company

agent

trustee

or

personal

representative

Calculate

Capital

Gains

Tax

on

property

If

you

have

Capital

Gains

Tax

to

pay

You

must

report

and

pay

any

Capital

Gains

Tax

on

most

sales

of

UK

property

within

days

Reporting

a

loss

The

rules

are

different

if

you

need

to

report

a

loss

Businesses

You

may

get

tax

relief

if

you

sell

property

that

you

use

for

business

This

may

reduce

or

delay

the

amount

of

Capital

Gains

Tax

you

pay

If

the

purpose

of

your

business

is

to

buy

and

sell

property

you

’re

a

property

developer

for

example

you

do

not

pay

Capital

Gains

Tax

when

you

sell

a

property

Instead

you

pay

Income

Tax

if

you

’re

a

sole

trader

or

partner

Corporation

Tax

if

you

’re

a

limited

company

There

are

special

rules

for

limited

companies

that

dispose

of

a

single

residential

property

worth

more

than

million

Selling

overseas

property

You

pay

Capital

Gains

Tax

when

you

dispose

of

overseas

property

if

you

’re

resident

in

the

UK

There

are

special

rules

if

you

’re

resident

in

the

UK

but

your

permanent

home

domicile

is

abroad

You

may

also

have

to

pay

tax

in

the

country

you

made

the

gain

If

you

’re

taxed

twice

you

may

be

able

to

claim

relief

If

you

’re

non

resident

Non

residents

may

have

to

pay

UK

tax

on

overseas

property

if

they

return

to

the

UK

within

years

of

leaving


Overview

You

can

claim

costs

if

someone

involved

in

your

planning

appeal

behaves

unreasonably

and

costs

you

money

You

make

a

claim

for

an

award

of

costs

to

the

Planning

Inspectorate

If

you

’re

successful

you

’ll

have

to

reach

an

agreement

with

the

other

party

about

how

much

they

pay

You

can

be

asked

to

pay

costs

if

you

behave

unreasonably

during

your

own

appeal

The

Planning

Inspectorate

can

do

this

even

if

nobody

’s

claiming

costs

against

you

Deadline

to

claim

for

costs

The

deadline

depends

on

whether

your

appeal

will

be

decided

at

a

hearing

or

inquiry

apply

before

it

closes

in

writing

apply

when

you

appeal

for

householder

commercial

and

tree

preservation

orders

or

before

the

final

comments

stage

for

anything

else

The

deadline

is

different

for

claims

about

a

site

visit

eg

someone

did

n’t

attend

apply

within

days

a

withdrawn

appeal

or

enforcement

notice

apply

within

weeks

When

to

claim

You

may

be

able

to

claim

costs

if

someone

involved

in

your

appeal

behaves

unreasonably

and

costs

you

money

This

includes

if

they

fail

to

co

operate

with

you

or

others

miss

deadlines

fail

to

turn

up

to

a

site

visit

hearing

or

inquiry

gave

information

that

was

wrong

or

declared

after

the

deadline

What

costs

you

can

claim

You

can

claim

for

costs

directly

related

to

your

appeal

for

example

time

preparing

for

an

appeal

attending

a

hearing

or

inquiry

the

use

of

consultants

to

provide

detailed

technical

advice

witnesses

if

you

need

to

pay

them

You

ca

n’t

claim

for

costs

relating

to

your

original

planning

application

How

to

claim

Claim

for

costs

by

filling

in

the

claim

form

Return

it

to

the

address

on

the

form

Alternatively

you

can

send

a

letter

to

the

Planning

Inspectorate

Include

why

you

think

someone

has

behaved

unreasonably

and

how

this

has

cost

you

money

After

you

claim

The

Planning

Inspectorate

will

consider

your

claim

The

party

being

asked

to

pay

will

have

an

opportunity

to

respond

in

writing

If

you

’re

successful

you

’ll

be

given

either

a

full

award

you

can

recover

all

your

costs

including

the

cost

of

claiming

a

partial

award

you

can

only

recover

some

costs

The

award

does

n’t

tell

you

how

much

you

should

get

It

’s

your

responsibility

to

prove

to

the

other

party

how

much

you

’ve

spent

on

the

appeal

If

they

wo

n’t

pay

You

can

make

a

court

claim

for

money

if

the

other

party

wo

n’t

pay


Get

advice

You

may

be

able

to

postpone

or

stop

your

home

being

repossessed

Check

if

you

can

get

legal

aid

to

help

with

your

legal

costs

You

can

get

advice

from

Civil

Legal

Advice

if

you

’re

eligible

Find

a

solicitor

You

can

also

get

free

advice

from

Citizens

Advice

National

Debtline

Shelter

your

local

council

The

law

for

repossession

in

Scotland

is

different

Before

it

goes

to

court

What

your

mortgage

lender

must

do

Before

a

mortgage

lender

can

repossess

your

home

they

must

tell

you

how

much

you

owe

consider

a

request

from

you

to

change

the

way

you

pay

your

mortgage

respond

to

any

offer

of

payment

you

make

give

you

reasons

for

turning

down

your

offer

of

payment

within

days

give

you

a

reasonable

amount

of

time

to

consider

any

proposal

they

make

give

you

days

written

warning

if

they

plan

to

start

court

action

tell

you

the

date

and

time

of

a

repossession

hearing

let

your

council

know

within

days

of

getting

notification

of

the

date

of

the

court

hearing

in

case

you

need

to

apply

to

the

council

as

homeless

Finding

a

solution

Even

if

your

mortgage

lender

starts

a

court

action

you

may

still

be

able

to

reach

an

agreement

with

them

You

’ll

still

need

to

attend

court

to

tell

the

judge

about

the

agreement

unless

the

court

tells

you

the

hearing

’s

been

cancelled

or

postponed

Defence

form

If

your

lender

starts

a

repossession

action

against

you

the

court

will

send

you

a

blank

defence

form

and

guidance

on

how

to

fill

it

in

You

can

use

the

form

to

explain

why

you

think

the

lender

should

not

repossess

your

home

You

need

to

return

it

within

days

The

court

will

also

send

you

copies

of

the

claim

forms

for

possessing

your

home

filled

in

by

your

lender

a

court

hearing

date

the

court

’s

contact

details

Help

with

legal

costs

Legal

aid

If

you

’re

on

a

low

income

you

may

be

able

to

get

legal

aid

Free

legal

advice

on

the

day

If

you

have

not

got

help

before

you

can

get

last

minute

legal

help

under

the

Housing

Possession

Court

Duty

scheme

The

scheme

runs

in

county

courts

in

England

and

Wales

It

provides

you

with

a

specialist

adviser

on

the

day

of

your

hearing

who

can

represent

you

help

you

come

to

an

arrangement

with

your

mortgage

lender

to

pay

off

your

debts

To

find

out

about

the

scheme

in

your

area

contact

your

local

council

or

the

court

where

your

case

is

being

heard

The

hearing

Repossession

hearings

normally

take

place

in

a

judge

’s

chambers

not

in

a

court

room

although

it

’s

treated

as

a

court

You

can

bring

an

adviser

or

friend

to

the

hearing

although

they

must

be

an

adult

If

you

do

not

attend

the

court

hearing

it

’s

likely

the

judge

will

give

your

mortgage

lender

the

right

to

evict

you

You

must

keep

to

any

agreement

you

make

in

court

to

pay

off

arrears

If

you

do

not

you

may

still

risk

losing

your

home

What

to

bring

with

you

You

’ll

likely

be

asked

for

proof

of

your

finances

This

can

include

payslips

bank

statements

job

offers

letters

about

benefits

estate

agent

letter

for

example

if

you

’re

trying

to

sell

your

home

to

pay

off

the

mortgage

Repossession

orders

The

lender

can

only

repossess

your

home

if

the

court

grants

permission

The

judge

could

decide

to

adjourn

delay

the

hearing

set

aside

the

case

which

means

no

order

will

be

made

and

the

hearing

is

finished

make

a

repossession

order

Outright

possession

order

This

gives

the

lender

a

legal

right

to

own

your

home

on

the

date

given

in

the

order

and

is

sometimes

called

an

order

for

possession

This

is

usually

days

after

your

court

hearing

If

you

do

not

leave

your

home

by

the

date

given

in

the

order

your

lender

can

ask

the

court

to

evict

you

Suspended

possession

order

This

means

that

if

you

make

regular

payments

as

set

out

in

the

order

you

can

stay

in

your

home

If

you

do

not

make

the

payments

your

lender

can

ask

the

court

to

evict

you

Money

order

This

means

that

you

have

to

pay

the

lender

the

amount

set

out

in

the

order

If

you

do

not

make

these

payments

money

could

be

deducted

from

your

wages

or

bank

account

bailiffs

may

take

away

things

you

own

Your

lender

can

not

use

a

money

order

to

evict

you

from

your

home

If

you

do

not

make

payments

set

out

in

a

money

order

on

time

your

lender

could

go

to

court

again

As

a

result

the

judge

could

decide

to

give

them

a

possession

order

Possession

order

with

money

judgment

A

money

judgment

is

usually

added

to

a

possession

order

It

means

you

owe

a

specific

amount

of

money

usually

made

up

of

your

mortgage

arrears

court

fees

your

lender

’s

legal

costs

A

money

judgment

will

not

apply

if

you

pay

your

mortgage

arrears

and

any

amount

set

out

in

a

suspended

order

your

lender

sells

your

home

and

the

sale

price

is

more

than

the

amount

set

out

in

the

money

judgment

If

you

do

not

pay

the

amount

set

out

in

the

money

judgment

the

lender

may

ask

the

court

to

carry

out

the

instructions

in

the

possession

order

and

the

judgment

Time

order

This

means

that

the

judge

changes

the

amount

you

pay

on

your

mortgage

for

a

set

time

by

changing

the

regular

amount

you

pay

changing

the

interest

rate

on

your

mortgage

delaying

the

next

time

you

have

to

make

a

payment

If

you

do

not

make

the

payments

your

lender

can

ask

the

court

to

evict

you

A

time

order

is

usually

only

made

on

some

types

of

loan

like

a

second

mortgage

Delaying

eviction

You

can

ask

a

judge

to

suspend

the

warrant

for

possession

This

means

delaying

the

eviction

or

allowing

you

to

stay

in

your

home

if

you

are

able

to

make

payments

again

A

new

hearing

will

be

held

but

the

judge

will

not

automatically

agree

to

suspend

the

possession

warrant

it

depends

what

happens

in

court

If

you

want

to

get

a

warrant

suspended

get

advice

immediately

Applying

for

a

suspension

If

you

want

to

apply

for

a

suspension

you

should

fill

out

the

application

notice

and

either

send

it

or

deliver

it

to

the

court

You

must

tell

the

court

that

you

need

a

hearing

at

short

notice

before

your

eviction

date

You

’ll

have

to

pay

a

court

fee

You

may

not

have

to

pay

the

fee

otherwise

known

as

fee

remission

if

you

’re

on

benefits

or

low

pay

Appealing

a

judge

's

decision

If

you

think

the

judge

made

mistakes

about

the

law

or

the

facts

of

your

case

in

the

original

hearing

you

may

be

able

to

appeal

Get

legal

advice

if

you

want

to

appeal

Normally

the

appeal

will

be

heard

by

a

more

senior

judge

Permission

to

appeal

You

can

ask

the

judge

at

the

end

of

your

original

possession

hearing

if

you

can

appeal

If

the

judge

refuses

to

give

permission

to

appeal

you

can

ask

a

more

senior

judge

If

you

get

permission

make

an

application

as

soon

as

possible

after

your

original

possession

hearing

You

’ll

have

to

pay

a

court

fee

You

may

not

have

to

pay

the

fee

if

you

’re

on

benefits

or

low

pay

What

could

happen

At

the

appeal

the

judge

can

make

a

number

of

decisions

including

keeping

the

original

decision

dismissing

the

previous

decision

or

changing

it

ordering

a

new

hearing

The

judge

can

also

decide

who

pays

the

legal

costs

of

the

appeal

If

your

home

is

repossessed

Help

from

your

council

Your

local

council

must

give

you

advice

to

help

you

find

a

new

home

Depending

on

your

circumstances

they

may

also

be

able

to

provide

you

with

emergency

accommodation

or

a

more

permanent

home

Buying

another

property

You

must

tell

any

new

mortgage

lender

that

your

previous

home

was

repossessed

This

could

make

getting

a

new

mortgage

hard

Your

previous

lender

may

be

able

to

claim

some

of

the

proceeds

of

your

new

home

if

you

still

owe

them

money

when

you

sell

it


What

you

pay

it

on

You

may

have

to

pay

Capital

Gains

Tax

if

you

make

a

profit

gain

when

you

sell

or

dispose

of

a

personal

possession

for

or

more

Possessions

you

may

need

to

pay

tax

on

include

jewellery

paintings

antiques

coins

and

stamps

sets

of

things

eg

matching

vases

or

chessmen

You

’ll

need

to

work

out

your

gain

to

find

out

whether

you

need

to

pay

tax

When

you

do

n’t

pay

it

You

do

n’t

usually

need

to

pay

tax

on

gifts

to

your

husband

wife

civil

partner

or

a

charity

You

do

n’t

pay

Capital

Gains

Tax

on

your

car

unless

you

’ve

used

it

for

business

anything

with

a

limited

lifespan

eg

clocks

unless

used

for

business

Jointly

owned

possessions

You

’re

exempt

from

paying

tax

on

the

first

of

your

share

if

you

own

a

possession

with

other

people

Work

out

your

gain

Your

gain

is

usually

the

difference

between

what

you

paid

for

your

personal

possession

and

what

you

sold

it

for

Use

the

market

value

instead

if

it

was

a

gift

there

are

different

rules

if

it

was

to

your

spouse

civil

partner

or

a

charity

you

sold

it

for

less

than

it

was

worth

to

help

the

buyer

you

inherited

it

and

do

n’t

know

the

Inheritance

Tax

value

you

owned

it

before

April

Deduct

costs

You

can

deduct

certain

costs

of

buying

selling

or

improving

your

personal

possession

from

your

gain

Costs

you

can

deduct

include

fees

eg

for

valuing

or

advertising

costs

to

improve

your

possession

but

not

repairs

VAT

unless

you

can

reclaim

it

You

ca

n’t

deduct

certain

costs

including

interest

on

a

loan

to

buy

your

possession

costs

you

can

claim

as

expenses

if

you

’ve

used

your

possession

for

business

Contact

HM

Revenue

and

Customs

HMRC

if

you

’re

not

sure

whether

you

can

deduct

a

certain

cost

If

you

sold

it

for

between

and

You

may

be

able

to

reduce

your

gain

if

you

got

between

and

for

your

possession

when

you

sold

or

disposed

of

it

Subtract

from

the

amount

you

’ve

received

Multiply

this

by

Compare

this

with

the

actual

gain

use

the

lower

amount

as

your

capital

gain

Work

out

if

you

need

to

pay

When

you

know

your

gain

you

can

work

out

if

you

need

to

report

and

pay

Capital

Gains

Tax

If

you

’ve

used

your

possession

for

business

you

can

reduce

or

delay

the

tax

you

pay

if

you

’re

eligible

for

tax

relief

Reporting

a

loss

The

rules

are

different

if

you

need

to

report

a

loss

You

can

claim

losses

for

possessions

sold

for

less

than

Work

out

your

loss

by

using

as

the

amount

you

sold

your

possession

for

and

report

it

in

your

tax

return

Possessions

with

a

limited

lifespan

You

do

n’t

have

to

pay

Capital

Gains

Tax

on

personal

possessions

with

a

lifespan

of

less

than

years

This

covers

all

machinery

and

includes

things

like

antique

clocks

or

watches

Different

rules

apply

if

you

’ve

used

the

possession

for

business

You

do

n’t

have

to

pay

Capital

Gains

Tax

if

it

does

n’t

qualify

for

capital

allowances

If

it

qualifies

you

may

need

to

pay

Capital

Gains

Tax

but

you

ca

n’t

claim

losses

Possessions

that

are

part

of

a

set

If

you

sell

all

or

part

of

a

set

to

the

same

person

for

less

than

you

wo

n’t

pay

tax

If

you

sell

parts

of

a

set

to

different

people

you

wo

n’t

pay

tax

on

each

part

sold

for

less

than

Sets

include

things

like

chessmen

books

by

the

same

author

matching

vases

and

sets

of

china


Overview

A

trust

is

a

way

of

managing

assets

money

investments

land

or

buildings

for

people

There

are

different

types

of

trusts

and

they

are

taxed

differently

Trusts

involve

the

settlor

the

person

who

puts

assets

into

a

trust

the

trustee

the

person

who

manages

the

trust

the

beneficiary

the

person

who

benefits

from

the

trust

This

guide

is

also

available

in

Welsh

Cymraeg

What

trusts

are

for

Trusts

are

set

up

for

a

number

of

reasons

including

to

control

and

protect

family

assets

when

someone

’s

too

young

to

handle

their

affairs

when

someone

can

not

handle

their

affairs

because

they

’re

incapacitated

to

pass

on

assets

while

you

’re

still

alive

to

pass

on

assets

when

you

die

a

will

trust

under

the

rules

of

inheritance

if

someone

dies

without

a

will

in

England

and

Wales

What

the

settlor

does

The

settlor

decides

how

the

assets

in

a

trust

should

be

used

this

is

usually

set

out

in

a

document

called

the

trust

deed

Sometimes

the

settlor

can

also

benefit

from

the

assets

in

a

trust

this

is

called

a

settlor

interested

trust

and

has

special

tax

rules

Find

out

more

by

reading

the

information

on

different

types

of

trust

What

trustees

do

The

trustees

are

the

legal

owners

of

the

assets

held

in

a

trust

Their

role

is

to

deal

with

the

assets

according

to

the

settlor

’s

wishes

as

set

out

in

the

trust

deed

or

their

will

manage

the

trust

on

a

day

to

day

basis

and

pay

any

tax

due

decide

how

to

invest

or

use

the

trust

’s

assets

If

the

trustees

change

the

trust

can

still

continue

but

there

always

has

to

be

at

least

one

trustee

Beneficiaries

There

might

be

more

than

one

beneficiary

like

a

whole

family

or

defined

group

of

people

They

may

benefit

from

the

income

of

a

trust

only

for

example

from

renting

out

a

house

held

in

a

trust

the

capital

only

for

example

getting

shares

held

in

a

trust

when

they

reach

a

certain

age

both

the

income

and

capital

of

the

trust

If

you

need

help

Contact

a

solicitor

or

tax

advisor

They

can

also

talk

to

HM

Revenue

and

Customs

HMRC

on

your

behalf

if

you

give

them

permission

You

can

also

get

help

from

the

Society

of

Trust

and

Estate

Practitioners

Types

of

trust

The

main

types

of

trust

are

bare

trusts

interest

in

possession

trusts

discretionary

trusts

accumulation

trusts

mixed

trusts

settlor

interested

trusts

non

resident

trusts

Each

type

of

trust

is

taxed

differently

Trusts

involve

a

trustee

settlor

and

beneficiary

Bare

trusts

Assets

in

a

bare

trust

are

held

in

the

name

of

a

trustee

However

the

beneficiary

has

the

right

to

all

of

the

capital

and

income

of

the

trust

at

any

time

if

they

’re

or

over

in

England

and

Wales

or

or

over

in

Scotland

This

means

the

assets

set

aside

by

the

settlor

will

always

go

directly

to

the

intended

beneficiary

Bare

trusts

are

often

used

to

pass

assets

to

young

people

the

trustees

look

after

them

until

the

beneficiary

is

old

enough

Interest

in

possession

trusts

These

are

trusts

where

the

trustee

must

pass

on

all

trust

income

to

the

beneficiary

as

it

arises

less

any

expenses

Discretionary

trusts

These

are

where

the

trustees

can

make

certain

decisions

about

how

to

use

the

trust

income

and

sometimes

the

capital

Depending

on

the

trust

deed

trustees

can

decide

what

gets

paid

out

income

or

capital

which

beneficiary

to

make

payments

to

how

often

payments

are

made

any

conditions

to

impose

on

the

beneficiaries

Discretionary

trusts

are

sometimes

set

up

to

put

assets

aside

for

a

future

need

like

a

grandchild

who

may

need

more

financial

help

than

other

beneficiaries

at

some

point

in

their

life

beneficiaries

who

are

not

capable

or

responsible

enough

to

deal

with

money

themselves

Accumulation

trusts

This

is

where

the

trustees

can

accumulate

income

within

the

trust

and

add

it

to

the

trust

’s

capital

They

may

also

be

able

to

pay

income

out

as

with

discretionary

trusts

Mixed

trusts

These

are

a

combination

of

more

than

one

type

of

trust

The

different

parts

of

the

trust

are

treated

according

to

the

tax

rules

that

apply

to

each

part

Settlor

interested

trusts

These

are

where

the

settlor

or

their

spouse

or

civil

partner

benefits

from

the

trust

The

trust

could

be

an

interest

in

possession

trust

an

accumulation

trust

a

discretionary

trust

Non

resident

trusts

This

is

a

trust

where

the

trustees

are

not

resident

in

the

UK

for

tax

purposes

The

tax

rules

for

non

resident

trusts

are

very

complicated

Parental

trusts

for

children

These

are

trusts

set

up

by

parents

for

children

under

who

have

never

been

married

or

in

a

civil

partnership

They

’re

not

a

type

of

trust

in

their

own

right

but

will

be

either

a

bare

trust

an

interest

in

possession

trust

an

accumulation

trust

a

discretionary

trust

Read

the

information

on

types

of

trust

to

find

out

more

Income

Tax

Income

Tax

on

income

from

the

trust

is

paid

by

the

trustees

but

the

settlor

is

responsible

for

it

This

means

The

trustees

pay

Income

Tax

on

the

trust

income

by

filling

out

a

Trust

and

Estate

Tax

Return

They

give

the

settlor

a

statement

of

all

the

income

and

the

rates

of

tax

charged

on

it

The

settlor

tells

HM

Revenue

and

Customs

HMRC

about

the

tax

the

trustees

have

paid

on

their

behalf

when

filling

out

their

Self

Assessment

tax

return

Trusts

for

vulnerable

people

Some

trusts

for

disabled

people

or

children

get

special

tax

treatment

These

are

called

trusts

for

vulnerable

beneficiaries

Who

qualifies

as

a

vulnerable

beneficiary

A

vulnerable

beneficiary

is

either

someone

under

whose

parent

has

died

or

a

disabled

person

who

is

eligible

for

any

of

the

following

benefits

even

if

they

do

not

receive

them

Attendance

Allowance

Disability

Living

Allowance

either

the

care

component

at

the

highest

or

middle

rate

or

the

mobility

component

at

the

higher

rate

Personal

Independence

Payment

an

increased

disablement

pension

Constant

Attendance

Allowance

Armed

Forces

Independence

Payment

A

vulnerable

beneficiary

can

also

be

someone

who

is

unable

to

manage

their

own

affairs

because

of

a

mental

health

condition

check

with

a

medical

professional

that

it

’s

covered

by

the

Mental

Health

Act

Trusts

that

qualify

for

special

tax

treatment

A

trust

does

not

qualify

for

special

Income

Tax

treatment

if

the

person

setting

it

up

can

benefit

from

the

trust

income

However

from

to

it

would

qualify

for

special

Capital

Gains

Tax

treatment

Trusts

for

children

who

’ve

lost

a

parent

are

usually

set

up

by

the

parent

’s

will

or

by

special

rules

of

inheritance

if

there

’s

no

will

If

someone

dies

without

a

will

in

Scotland

a

trust

set

up

there

for

their

children

is

usually

treated

as

a

bare

trust

for

tax

purposes

If

there

’s

more

than

one

beneficiary

If

there

are

beneficiaries

who

are

not

vulnerable

the

assets

and

income

for

the

vulnerable

beneficiary

must

be

identified

and

kept

separate

used

only

for

that

person

Only

that

part

of

the

trust

gets

special

tax

treatment

Claiming

special

tax

treatment

To

claim

special

treatment

for

Income

Tax

and

Capital

Gains

Tax

the

trustees

have

to

fill

in

the

Vulnerable

Person

Election

form

If

there

’s

more

than

one

vulnerable

beneficiary

each

needs

a

separate

form

The

trustees

and

beneficiary

must

both

sign

the

form

If

the

vulnerable

person

dies

or

is

no

longer

vulnerable

the

trustees

must

tell

HMRC

Income

Tax

In

a

trust

with

a

vulnerable

beneficiary

the

trustees

are

entitled

to

a

deduction

of

Income

Tax

It

’s

calculated

like

this

Trustees

work

out

what

their

trust

Income

Tax

would

be

if

there

was

no

claim

for

special

treatment

this

will

vary

according

to

which

type

of

trust

it

is

They

then

work

out

what

Income

Tax

the

vulnerable

person

would

have

paid

if

the

trust

income

had

been

paid

directly

to

them

as

an

individual

They

can

then

claim

the

difference

between

these

figures

as

a

deduction

from

their

own

Income

Tax

liability

This

is

a

complicated

calculation

but

there

’s

a

detailed

worked

example

on

the

HMRC

website

Capital

Gains

Tax

Capital

Gains

Tax

may

be

due

if

assets

are

sold

given

away

exchanged

or

transferred

in

another

way

and

they

’ve

gone

up

in

value

since

being

put

into

trust

Tax

is

only

paid

by

trustees

if

the

assets

have

increased

in

value

above

the

annual

exempt

amount

which

is

an

allowance

of

for

people

who

have

a

mental

or

physical

disability

or

for

other

trustees

Trustees

are

responsible

for

paying

any

Capital

Gains

Tax

due

If

the

trust

is

for

vulnerable

people

trustees

can

claim

a

reduction

which

is

calculated

like

this

They

work

out

what

they

would

pay

if

there

was

no

reduction

They

then

work

out

what

the

beneficiary

would

have

to

pay

if

the

gains

had

come

directly

to

them

They

can

claim

the

difference

between

these

amounts

as

a

reduction

on

what

they

have

to

pay

in

Capital

Gains

Tax

using

form

This

special

Capital

Gains

Tax

treatment

does

not

apply

in

the

tax

year

when

the

beneficiary

dies

Inheritance

Tax

These

are

the

situations

when

trusts

for

vulnerable

people

get

special

Inheritance

Tax

treatment

for

a

disabled

person

whose

trust

was

set

up

before

April

at

least

half

of

the

payments

from

the

trust

must

go

to

the

disabled

person

during

their

lifetime

for

a

disabled

person

whose

trust

was

set

up

on

or

after

April

all

payments

must

go

to

the

disabled

person

except

for

up

to

per

year

or

of

the

assets

if

that

’s

lower

which

can

be

used

for

someone

else

’s

benefit

when

someone

who

has

a

condition

that

’s

expected

to

make

them

disabled

sets

up

a

trust

for

themselves

for

a

bereaved

minor

they

must

take

all

the

assets

and

income

at

or

before

becoming

There

’s

no

Inheritance

Tax

charge

if

the

person

who

set

up

the

trust

survives

years

from

the

date

they

set

it

up

on

transfers

made

out

of

a

trust

to

a

vulnerable

beneficiary

When

the

beneficiary

dies

any

assets

held

in

the

trust

on

their

behalf

are

treated

as

part

of

their

estate

and

Inheritance

Tax

may

be

charged

Trusts

usually

have

year

Inheritance

Tax

charges

but

trusts

with

vulnerable

beneficiaries

are

exempt

Trusts

and

Income

Tax

Different

types

of

trust

income

have

different

rates

of

Income

Tax

Each

type

of

trust

is

taxed

differently

Trusts

involve

a

trustee

settlor

and

beneficiary

Accumulation

or

discretionary

trusts

Trustees

are

responsible

for

paying

tax

on

income

received

by

accumulation

or

discretionary

trusts

The

first

is

taxed

at

the

standard

rate

If

the

settlor

has

more

than

one

trust

this

is

divided

by

the

number

of

trusts

they

have

However

if

the

settlor

has

set

up

or

more

trusts

the

standard

rate

band

for

each

trust

is

The

tax

rates

are

below

Trust

income

up

to

Type

of

income

Tax

rate

Dividend

type

income

All

other

income

Trust

income

over

Type

of

income

Tax

rate

Dividend

type

income

All

other

income

Dividends

Trustees

do

not

qualify

for

the

dividend

allowance

This

means

trustees

pay

tax

on

all

dividends

depending

on

the

tax

band

they

fall

within

Interest

in

possession

trusts

The

trustees

are

responsible

for

paying

Income

Tax

at

the

rates

below

Type

of

income

Income

Tax

rate

Dividend

type

income

All

other

income

Sometimes

the

trustees

mandate

income

to

the

beneficiary

This

means

it

goes

to

them

directly

instead

of

being

passed

through

the

trustees

If

this

happens

the

beneficiary

needs

to

include

this

on

their

Self

Assessment

tax

return

and

pay

tax

on

it

Bare

trusts

If

you

’re

the

beneficiary

of

a

bare

trust

you

’re

responsible

for

paying

tax

on

income

from

it

You

need

to

tell

HMRC

about

the

income

on

a

Self

Assessment

tax

return

If

you

do

not

usually

send

a

tax

return

you

need

to

register

for

self

assessment

by

October

following

the

tax

year

you

had

the

income

Settlor

interested

trusts

The

settlor

is

responsible

for

Income

Tax

on

these

trusts

even

if

some

of

the

income

is

not

paid

out

to

them

However

the

Income

Tax

is

paid

by

the

trustees

as

they

receive

the

income

The

trustees

pay

Income

Tax

on

the

trust

income

by

filling

out

a

Trust

and

Estate

Tax

Return

They

give

the

settlor

a

statement

of

all

the

income

and

the

rates

of

tax

charged

on

it

The

settlor

tells

HMRC

about

the

tax

the

trustees

have

paid

on

their

behalf

on

a

Self

Assessment

tax

return

The

rate

of

Income

Tax

depends

on

what

type

of

trust

the

settlor

interested

trust

is

Other

types

of

trust

There

are

special

tax

rules

for

parental

trusts

for

children

trusts

for

vulnerable

people

and

trusts

where

the

trustees

are

not

resident

in

the

UK

for

tax

purposes

These

are

called

non

resident

trusts

If

you

’re

the

beneficiary

Depending

on

the

type

of

trust

and

your

income

you

might

be

able

to

claim

some

of

the

Income

Tax

back

If

you

’re

the

trustee

Get

help

completing

the

Trust

and

Estate

Tax

return

If

you

need

more

help

There

’s

more

detailed

guidance

on

trusts

and

Income

Tax

Contact

HMRC

or

get

professional

tax

advice

if

you

need

help

Trusts

and

Capital

Gains

Tax

Capital

Gains

Tax

is

a

tax

on

the

profit

gain

when

something

an

asset

that

’s

increased

in

value

is

taken

out

of

or

put

into

a

trust

When

Capital

Gains

Tax

might

be

payable

If

assets

are

put

into

a

trust

Tax

is

paid

by

either

the

person

selling

the

asset

to

the

trust

transferring

the

asset

the

settlor

If

assets

are

taken

out

of

a

trust

The

trustees

usually

have

to

pay

the

tax

if

they

sell

or

transfer

assets

on

behalf

of

the

beneficiary

There

’s

no

tax

to

pay

in

bare

trusts

if

the

assets

are

transferred

to

the

beneficiary

Sometimes

an

asset

might

be

transferred

to

someone

else

but

Capital

Gains

Tax

is

not

payable

This

happens

when

someone

dies

and

an

interest

in

possession

ends

A

beneficiary

gets

some

or

all

of

the

assets

in

a

trust

Sometimes

the

beneficiary

of

a

trust

becomes

absolutely

entitled

and

can

tell

the

trustees

what

to

do

with

the

assets

for

example

when

they

reach

a

certain

age

In

this

case

the

trustees

pay

Capital

Gains

Tax

based

on

the

assets

market

value

when

the

beneficiary

became

entitled

to

them

Non

UK

resident

trusts

The

rules

for

Capital

Gains

Tax

on

non

UK

resident

trusts

are

complicated

You

can

get

help

with

your

tax

Working

out

total

gains

Trustees

need

to

work

out

the

total

taxable

gain

to

know

if

they

have

to

pay

Capital

Gains

Tax

Allowable

costs

Trustees

can

deduct

costs

to

reduce

gains

including

the

cost

of

the

property

including

any

administration

fees

professional

fees

for

example

for

a

solicitor

or

stockbroker

the

cost

of

improving

property

or

land

to

increase

its

value

for

example

building

a

conservatory

but

not

repairs

or

regular

maintenance

Tax

reliefs

Trustees

might

be

able

to

reduce

or

delay

the

amount

of

tax

the

trust

pays

if

gains

are

eligible

for

tax

relief

Relief

Description

Private

Residence

Relief

Trustees

pay

no

Capital

Gains

Tax

when

they

sell

a

property

the

trust

owns

It

must

be

the

main

residence

for

someone

allowed

to

live

there

under

the

rules

of

the

trust

Entrepreneurs

Relief

Trustees

pay

Capital

Gains

Tax

on

qualifying

gains

if

they

sell

assets

used

in

a

beneficiary

’s

business

which

has

now

ended

They

may

also

get

relief

when

they

sell

shares

in

a

company

where

the

beneficiary

had

at

least

of

shares

and

voting

rights

Hold

Over

Relief

Trustees

pay

no

tax

if

they

transfer

assets

to

beneficiaries

or

other

trustees

in

some

cases

The

recipient

pays

tax

when

they

sell

or

dispose

of

the

assets

unless

they

also

claim

relief

Tax

free

allowance

Trustees

only

have

to

pay

Capital

Gains

Tax

if

the

total

taxable

gain

is

above

the

trust

’s

tax

free

allowance

called

the

Annual

Exempt

Amount

The

tax

free

allowance

for

trusts

is

if

the

beneficiary

is

vulnerable

a

disabled

person

or

a

child

whose

parent

has

died

If

there

’s

more

than

one

beneficiary

the

higher

allowance

may

apply

even

if

only

one

of

them

is

vulnerable

See

tax

free

allowances

for

previous

years

The

tax

free

allowance

may

be

reduced

if

the

trust

’s

settlor

has

set

up

more

than

one

trust

settlement

since

June

There

’s

more

detailed

information

about

Capital

Gains

Tax

and

Self

Assessment

for

trusts

Report

gains

to

HMRC

If

you

’re

the

trustee

report

any

gains

as

part

of

your

Trust

and

Estate

Tax

Return

You

’ll

need

to

download

and

fill

in

form

if

you

’re

sending

your

tax

return

by

post

If

you

’re

the

beneficiary

you

need

to

report

and

pay

through

a

Self

Assessment

tax

return

The

rules

are

different

for

reporting

a

loss

If

you

need

more

help

There

’s

more

detailed

guidance

on

Capital

Gains

Tax

Contact

HMRC

or

get

professional

tax

advice

if

you

need

help

Trusts

and

Inheritance

Tax

Inheritance

Tax

may

have

to

be

paid

on

a

person

’s

estate

their

money

and

possessions

when

they

die

Inheritance

Tax

is

due

at

on

anything

above

the

threshold

but

there

’s

a

reduced

rate

of

if

the

person

’s

will

leaves

more

than

of

their

estate

to

charity

Inheritance

Tax

can

also

apply

when

you

’re

alive

if

you

transfer

some

of

your

estate

into

a

trust

When

Inheritance

Tax

is

due

The

main

situations

when

Inheritance

Tax

is

due

are

when

assets

are

transferred

into

a

trust

when

a

trust

reaches

a

year

anniversary

of

when

it

was

set

up

there

are

yearly

Inheritance

Tax

charges

when

assets

are

transferred

out

of

a

trust

known

as

exit

charges

or

the

trust

ends

when

someone

dies

and

a

trust

is

involved

when

sorting

out

their

estate

What

you

pay

Inheritance

Tax

on

You

pay

Inheritance

Tax

on

relevant

property

assets

like

money

shares

houses

or

land

This

includes

the

assets

in

most

trusts

There

are

some

occasions

where

you

may

not

have

to

pay

Inheritance

Tax

for

example

where

the

trust

contains

excluded

property

Special

rules

Some

types

of

trust

are

treated

differently

for

Inheritance

Tax

purposes

Bare

trusts

These

are

where

the

assets

in

a

trust

are

held

in

the

name

of

a

trustee

but

go

directly

to

the

beneficiary

who

has

a

right

to

both

the

assets

and

income

of

the

trust

Transfers

into

a

bare

trust

may

also

be

exempt

from

Inheritance

Tax

as

long

as

the

person

making

the

transfer

survives

for

years

after

making

the

transfer

Interest

in

possession

trusts

These

are

trusts

where

the

beneficiary

is

entitled

to

trust

income

as

it

’s

produced

this

is

called

their

interest

in

possession

On

assets

transferred

into

this

type

of

trust

before

March

there

’s

no

Inheritance

Tax

to

pay

On

assets

transferred

on

or

after

March

the

yearly

Inheritance

Tax

charge

may

be

due

During

the

life

of

the

trust

there

’s

no

Inheritance

Tax

to

pay

as

long

as

the

asset

stays

in

the

trust

and

remains

the

interest

of

the

beneficiary

Between

March

and

October

beneficiaries

of

an

interest

in

possession

trust

could

pass

on

their

interest

in

possession

to

other

beneficiaries

like

their

children

this

was

called

making

a

transitional

serial

interest

there

’s

no

Inheritance

Tax

to

pay

in

this

situation

From

October

beneficiaries

of

an

interest

in

possession

trust

can

not

pass

their

interest

on

as

a

transitional

serial

interest

if

an

interest

is

transferred

after

this

date

there

may

be

a

charge

of

and

a

yearly

Inheritance

Tax

charge

will

be

payable

unless

it

’s

a

disabled

trust

If

you

inherit

an

interest

in

possession

trust

from

someone

who

has

died

there

’s

no

Inheritance

Tax

at

the

year

anniversary

Instead

tax

will

be

due

when

you

die

If

the

trust

is

set

up

by

a

will

Someone

might

ask

that

some

or

all

of

their

assets

are

put

into

a

trust

This

is

called

a

will

trust

The

personal

representative

of

the

deceased

person

has

to

make

sure

that

the

trust

is

properly

set

up

with

all

taxes

paid

and

the

trustees

make

sure

that

Inheritance

Tax

is

paid

on

any

future

charges

If

the

deceased

transferred

assets

into

a

trust

before

they

died

If

you

’re

valuing

the

estate

of

someone

who

has

died

you

’ll

need

to

find

out

whether

they

made

any

transfers

in

the

years

before

they

died

If

they

did

and

they

paid

Inheritance

Tax

you

’ll

need

to

pay

an

extra

from

the

estate

Even

if

no

Inheritance

Tax

was

due

on

the

transfer

you

still

have

to

add

its

value

to

the

person

’s

estate

when

you

’re

valuing

it

for

Inheritance

Tax

purposes

Trusts

for

bereaved

minors

A

bereaved

minor

is

a

person

under

who

has

lost

at

least

one

parent

or

step

parent

Where

a

trust

is

set

up

for

a

bereaved

minor

there

are

no

Inheritance

Tax

charges

if

the

assets

in

the

trust

are

set

aside

just

for

bereaved

minor

they

become

fully

entitled

to

the

assets

by

the

age

of

A

trust

for

a

bereaved

young

person

can

also

be

set

up

as

an

to

trust

the

yearly

charges

do

not

apply

However

the

main

differences

are

the

beneficiary

must

become

fully

entitled

to

the

assets

in

the

trust

by

the

age

of

when

the

beneficiary

is

aged

between

and

Inheritance

Tax

exit

charges

may

apply

Trusts

for

disabled

beneficiaries

There

’s

no

yearly

charge

or

exit

charge

on

this

type

of

trust

as

long

as

the

asset

stays

in

the

trust

and

remains

the

interest

of

the

beneficiary

You

also

do

not

have

to

pay

Inheritance

Tax

on

the

transfer

of

assets

into

a

trust

for

a

disabled

person

as

long

as

the

person

making

the

transfer

survives

for

years

after

making

the

transfer

Paying

Inheritance

Tax

You

pay

Inheritance

Tax

using

form

If

you

’re

valuing

the

estate

of

someone

who

’s

died

you

may

have

to

value

other

assets

apart

from

trusts

to

see

if

Inheritance

Tax

is

due

More

help

and

information

There

’s

more

detailed

guidance

on

trusts

and

Inheritance

Tax

Contact

HMRC

or

get

professional

tax

advice

if

you

need

help

Beneficiaries

paying

and

reclaiming

tax

on

trusts

If

you

’re

a

trust

beneficiary

there

are

different

rules

depending

on

the

type

of

trust

You

might

have

to

pay

tax

through

Self

Assessment

or

you

might

be

entitled

to

a

tax

refund

If

you

do

not

usually

send

a

tax

return

and

need

to

you

must

register

for

Self

Assessment

by

October

following

the

tax

year

you

had

the

income

Read

the

information

on

the

different

types

of

trust

to

understand

the

main

differences

between

them

If

you

’re

not

sure

what

type

of

trust

you

have

ask

the

trustees

If

you

’re

the

beneficiary

of

a

bare

trust

you

are

responsible

for

declaring

and

paying

tax

on

its

income

Do

this

on

a

Self

Assessment

tax

return

If

you

do

not

usually

send

a

tax

return

and

need

to

you

must

register

for

Self

Assessment

by

October

following

the

tax

year

you

had

the

income

Interest

in

possession

trusts

If

you

’re

the

beneficiary

of

this

type

of

trust

you

’re

entitled

to

its

income

after

expenses

as

it

arises

If

you

ask

for

a

statement

the

trustees

must

tell

you

the

different

sources

of

income

how

much

income

you

’ve

been

given

how

much

tax

has

been

paid

on

the

income

You

’ll

usually

get

income

sent

through

the

trustees

but

they

might

pass

it

to

you

directly

without

paying

tax

first

If

this

happens

you

need

to

include

it

on

your

Self

Assessment

tax

return

If

you

do

not

usually

send

a

tax

return

you

must

register

for

Self

Assessment

by

October

the

year

after

you

were

given

the

income

If

you

’re

a

basic

rate

taxpayer

You

will

not

owe

any

extra

tax

You

’ll

still

need

to

complete

a

Self

Assessment

tax

return

to

show

the

income

you

receive

from

an

interest

in

possession

trust

but

you

will

get

a

credit

for

the

tax

paid

by

the

trustees

This

means

the

income

is

not

taxed

twice

If

you

’re

a

higher

rate

taxpayer

You

’ll

have

to

pay

extra

tax

on

the

difference

between

what

tax

the

trustees

have

paid

and

what

you

as

a

higher

rate

taxpayer

are

liable

for

This

will

be

calculated

when

you

do

your

Self

Assessment

How

to

reclaim

tax

You

can

reclaim

tax

paid

on

dividends

if

you

’re

entitled

to

dividend

allowance

savings

interest

if

you

’re

entitled

to

personal

savings

allowance

trade

and

property

income

if

you

’re

entitled

to

trading

allowance

or

property

allowance

The

allowance

amount

will

be

reduced

if

it

’s

already

been

used

against

some

income

The

allowance

you

have

left

is

called

the

available

allowance

If

the

amount

of

income

you

receive

is

less

than

or

equal

to

the

available

allowance

you

can

reclaim

all

of

the

tax

paid

If

the

amount

of

income

you

receive

is

more

than

the

available

allowance

you

can

only

claim

the

tax

paid

on

the

available

allowance

If

you

’re

a

Self

Assessment

taxpayer

the

repayment

will

be

calculated

as

part

of

your

return

If

you

’re

not

a

Self

Assessment

taxpayer

you

can

reclaim

the

tax

using

form

You

need

to

make

a

separate

claim

for

each

tax

year

Accumulation

or

discretionary

trusts

With

these

trusts

all

income

received

by

beneficiaries

is

treated

as

though

it

has

already

been

taxed

at

If

you

’re

an

additional

rate

taxpayer

there

will

be

no

more

tax

to

pay

You

may

be

able

to

claim

tax

back

on

trust

income

you

’ve

received

if

any

of

the

following

apply

you

’re

a

non

taxpayer

you

pay

tax

at

the

basic

rate

of

you

pay

tax

at

the

higher

rate

of

You

can

reclaim

the

tax

paid

using

form

If

you

complete

a

tax

return

you

can

claim

through

Self

Assessment

Settlor

interested

discretionary

trusts

If

a

settlor

interested

trust

is

a

discretionary

trust

payments

made

to

the

settlor

’s

spouse

or

civil

partner

are

treated

as

though

they

’ve

already

been

taxed

at

There

’s

no

more

tax

to

pay

However

unlike

payments

made

from

other

types

of

trusts

the

tax

credit

can

not

be

claimed

back

Non

resident

trusts

This

is

a

trust

where

the

trustees

are

not

resident

in

the

UK

for

tax

purposes

The

tax

rules

for

this

type

of

trust

are

very

complicated

there

’s

detailed

guidance

on

non

resident

trusts

If

a

pension

scheme

pays

into

a

trust

When

a

pension

scheme

pays

a

taxable

lump

sum

into

a

trust

after

the

pension

holder

dies

the

payment

is

taxed

at

If

you

’re

a

beneficiary

and

receive

a

payment

funded

by

this

lump

sum

you

’ll

also

be

taxed

You

can

claim

back

tax

paid

on

the

original

lump

sum

do

this

on

your

Self

Assessment

tax

return

if

you

complete

one

or

using

form

The

trust

will

tell

you

the

amount

you

need

to

report

this

will

normally

be

more

than

the

amount

you

actually

receive

Trustees

tax

responsibilities

As

the

trustee

you

’re

responsible

for

reporting

and

paying

tax

on

behalf

of

the

trust

If

there

are

or

more

trustees

nominate

one

as

the

principal

acting

trustee

to

manage

its

tax

The

other

trustees

are

still

accountable

and

can

be

charged

tax

and

interest

if

the

trust

does

not

pay

Registering

a

trust

Once

a

trust

becomes

liable

for

tax

you

must

register

the

trust

with

HM

Revenue

and

Customs

Sending

tax

returns

You

must

report

the

trust

’s

income

and

gains

in

a

trust

and

estate

Self

Assessment

tax

return

after

the

end

of

each

tax

year

You

can

either

buy

software

to

send

it

electronically

by

January

fill

in

paper

form

and

post

it

to

HMRC

by

October

months

earlier

You

can

also

get

help

for

example

from

HMRC

or

by

getting

an

accountant

to

do

your

return

for

you

After

you

’ve

sent

your

return

HMRC

will

tell

you

how

much

you

owe

You

’ll

need

to

pay

your

Self

Assessment

bill

by

the

deadline

You

’ll

need

to

collect

and

keep

records

for

example

bank

statements

to

complete

your

tax

return

Telling

beneficiaries

about

tax

and

income

You

must

give

the

beneficiary

a

statement

with

the

amount

of

income

and

tax

paid

by

the

trust

if

they

ask

You

can

use

form

trust

to

do

this

There

’s

a

different

form

if

you

need

to

provide

a

statement

to

a

settlor

who

retains

an

interest

If

there

’s

more

than

one

beneficiary

you

must

give

each

of

them

this

information

relative

to

the

amount

they

receive

Death

benefit

payments

from

a

pension

scheme

You

must

give

the

beneficiary

extra

information

if

both

the

following

apply

you

make

a

payment

funded

by

a

taxable

lump

sum

from

a

pension

scheme

the

pension

holder

has

died

Use

form

LSDB

if

you

’re

a

trustee

There

’s

a

different

form

if

you

’re

a

pension

administrator

You

must

tell

the

beneficiary

within

days

Other

responsibilities

You

may

have

to

report

other

things

to

HMRC

You

need

to

use

the

online

service

to

tell

HMRC

if

there

are

any

changes

to

the

trust

fill

in

form

when

the

trust

needs

to

pay

Inheritance

Tax

Your

other

responsibilities

as

a

trustee

depend

on

the

type

of

trust

and

any

instructions

from

the

person

who

set

up

the

trust

in

the

trust

deed

When

you

must

register

a

trust

You

must

register

your

trust

with

HM

Revenue

and

Customs

HMRC

if

it

becomes

liable

for

any

of

the

following

Capital

Gains

Tax

Income

Tax

Inheritance

Tax

Stamp

Duty

Land

Tax

or

Land

and

Buildings

Transaction

Tax

in

Scotland

Stamp

Duty

Reserve

Tax

You

must

also

register

a

trust

to

claim

tax

relief

Non

resident

trusts

You

must

register

a

non

resident

trust

if

it

becomes

liable

for

tax

on

UK

income

tax

on

UK

assets

You

can

get

professional

advice

from

a

solicitor

or

tax

advisor

about

registering

a

trust

When

you

do

not

need

to

register

your

trust

You

do

not

need

to

register

your

trust

if

it

has

to

pay

Income

Tax

of

less

than

on

interest

only

the

settlor

or

beneficiary

of

the

trust

has

to

pay

tax

it

’s

a

bare

trust

it

’s

a

charitable

trust

it

’s

a

resulting

trust

and

the

assets

go

back

to

the

settlor

because

all

the

beneficiaries

have

died

it

’s

a

statutory

trust

created

through

legislation

it

’s

a

constructive

trust

imposed

by

a

court

it

holds

a

pension

scheme

already

registered

with

HMRC

You

also

do

not

need

to

register

your

trust

if

you

have

to

file

information

under

the

Foreign

Account

Tax

Compliance

Act

FATCA

for

Common

Reporting

Standard

CRS

purposes

Deadlines

for

registering

The

deadline

depends

on

the

tax

your

trust

is

liable

for

Trusts

liable

for

Income

Tax

or

Capital

Gains

Tax

If

it

’s

the

first

time

your

trust

is

liable

for

either

tax

the

deadline

is

October

in

the

tax

year

after

it

first

becomes

liable

for

these

taxes

For

example

if

your

trust

first

becomes

liable

for

Income

Tax

during

the

to

tax

year

you

must

register

by

October

If

your

trust

has

been

liable

for

either

tax

before

the

deadline

is

January

in

the

tax

year

after

it

’s

again

liable

for

these

taxes

For

example

if

your

trust

is

liable

for

Income

Tax

during

the

to

tax

year

and

it

has

been

liable

for

Income

Tax

before

you

must

register

by

January

Trusts

liable

for

other

taxes

You

must

register

by

January

in

the

tax

year

after

the

one

in

which

the

trust

is

liable

for

any

of

the

following

Inheritance

Tax

Stamp

Duty

Land

Tax

or

Land

and

Buildings

Transaction

Tax

in

Scotland

Stamp

Duty

Reserve

Tax

You

must

register

by

the

earlier

deadline

if

your

trust

is

liable

for

more

than

one

tax

and

both

deadlines

apply

How

to

register

How

you

register

a

trust

depends

on

whether

you

’re

a

trustee

an

agent

registering

a

trust

for

a

client

There

’s

a

different

process

if

you

need

to

register

an

estate

of

someone

who

’s

died


When

you

can

make

a

statutory

demand

You

can

make

a

statutory

demand

to

ask

for

payment

of

a

debt

from

an

individual

or

company

Anyone

who

’s

owed

money

the

creditor

can

make

a

statutory

demand

You

do

not

need

a

lawyer

If

the

debt

’s

over

years

old

you

can

not

usually

make

a

statutory

demand

You

can

get

legal

advice

instead

There

may

be

faster

ways

of

getting

smaller

debts

paid

than

making

a

statutory

demand

When

the

individual

or

company

that

owes

you

money

the

debtor

receives

a

statutory

demand

they

have

days

to

either

pay

the

debt

reach

an

agreement

to

pay

You

can

apply

to

bankrupt

your

debtor

or

close

wind

up

their

company

if

they

do

not

respond

to

the

statutory

demand

within

days

Statutory

demand

forms

Choose

the

form

you

need

fill

it

in

and

deliver

serve

it

to

the

individual

or

company

that

owes

you

money

You

do

not

need

to

send

a

separate

letter

Serve

a

demand

on

an

individual

including

partners

in

a

partnership

Which

form

you

need

depends

on

whether

you

’re

collecting

a

debt

that

’s

payable

now

payable

now

following

a

judgment

or

court

order

payable

in

the

future

if

you

think

they

will

not

be

able

to

pay

the

debt

when

they

need

to

If

you

’re

serving

a

demand

on

a

business

partnership

you

need

to

download

and

fill

in

a

form

for

each

partner

Serve

a

demand

on

a

limited

company

Use

statutory

demand

form

SD

If

you

’re

in

Scotland

You

must

use

a

different

form

to

make

a

statutory

demand

in

Scotland

How

to

serve

a

statutory

demand

You

must

deliver

serve

the

statutory

demand

form

by

giving

it

to

the

individual

who

owes

you

money

you

should

try

all

their

known

addresses

leaving

it

at

the

registered

office

of

the

company

or

partnership

that

owes

money

or

the

main

place

of

business

if

they

do

not

have

a

registered

office

giving

it

to

the

company

’s

director

company

secretary

manager

or

principal

officer

get

a

process

server

to

serve

it

for

you

a

solicitor

can

arrange

this

You

can

only

send

it

by

registered

post

or

put

it

through

a

letterbox

if

it

can

not

be

delivered

in

person

Records

you

must

keep

You

must

keep

a

copy

of

the

statutory

demand

and

anything

that

confirms

the

time

and

date

you

served

the

statutory

demand

for

example

a

postage

receipt

or

confirmation

from

your

process

server

the

debtor

has

received

the

statutory

demand

You

’ll

need

this

information

if

your

demand

is

ignored

If

your

demand

is

ignored

If

your

debtor

does

not

pay

the

debt

or

agree

to

your

statutory

demand

within

days

you

can

start

bankruptcy

proceedings

against

any

individuals

who

owe

you

or

more

wind

up

a

company

that

owes

you

or

more

You

have

months

to

apply

to

bankrupt

or

wind

up

your

debtor

If

you

’re

late

explain

why

to

the

court

named

on

the

statutory

demand

Serve

a

statutory

demand

abroad

Get

legal

help

if

you

want

to

serve

a

statutory

demand

in

another

country

You

need

to

serve

a

statutory

demand

according

to

local

laws

but

also

according

to

the

UK

rules

Challenge

a

statutory

demand

If

you

do

not

agree

with

a

statutory

demand

you

’ve

been

given

you

can

apply

to

challenge

it

and

get

it

set

aside

You

can

be

made

bankrupt

or

your

company

wound

up

if

you

ignore

a

statutory

demand

You

must

apply

to

the

court

named

on

your

statutory

demand

Contact

a

solicitor

or

your

nearest

county

court

if

you

’re

not

sure

where

to

send

your

application

You

can

not

challenge

a

statutory

demand

if

it

was

served

on

a

company

You

can

apply

to

stop

your

creditors

from

winding

up

your

company

instead

Any

bankruptcy

petitions

the

creditor

has

already

filed

against

you

will

usually

be

suspended

until

the

court

reaches

a

decision

The

court

will

not

usually

set

aside

a

statutory

demand

if

it

was

served

on

you

following

the

judgment

of

another

court

unless

for

example

you

think

the

creditor

owes

you

the

same

amount

as

your

debt

or

more

the

amount

on

the

statutory

demand

is

secured

Deadlines

You

must

apply

to

challenge

the

statutory

demand

within

either

days

if

you

were

in

the

UK

when

you

got

the

statutory

demand

to

days

if

you

were

in

another

country

when

you

got

the

statutory

demand

check

the

table

of

countries

for

specific

deadlines

If

the

deadline

is

during

a

weekend

or

on

a

bank

holiday

you

have

until

the

next

day

the

court

is

open

to

apply

You

might

be

able

to

get

an

extension

in

some

circumstances

contact

the

court

to

find

out

what

these

are

How

to

apply

Download

and

fill

in

form

IAA

Make

copies

of

the

completed

form

and

either

post

them

to

the

court

named

on

your

statutory

demand

or

give

them

to

the

court

in

person

What

happens

next

You

’ll

usually

hear

back

from

the

court

within

working

days

of

applying

If

the

court

does

not

agree

with

your

application

it

can

give

the

creditor

permission

to

issue

a

bankruptcy

petition

against

you

If

the

court

agrees

with

your

application

your

case

will

be

passed

on

to

a

bankruptcy

registrar

They

’ll

look

at

your

case

and

arrange

a

hearing

What

happens

at

the

hearing

Both

sides

will

present

their

case

to

a

registrar

or

judge

They

’ll

either

make

a

decision

then

or

ask

you

and

the

other

party

to

give

more

evidence

at

another

hearing

You

’ll

usually

get

a

decision

at

the

end

of

the

final

hearing

If

you

win

your

case

you

’ll

get

an

order

from

the

court

setting

aside

the

statutory

demand

The

deadline

for

paying

the

debt

will

be

suspended

If

you

lose

you

’ll

have

to

pay

back

your

debt

within

the

day

time

limit

The

creditor

can

apply

to

bankrupt

you

if

you

do

not

pay

in

time

and

your

debt

is

or

more

Do

not

go

to

court

if

you

have

coronavirus

symptoms

or

if

you

’re

self

isolating

or

in

quarantine

Tell

the

court

if

you

can

not

attend

Contact

the

Insolvency

Service

Use

the

contact

form

to

contact

the

Insolvency

Service

about

delivering

and

challenging

a

statutory

demand

You

can

not

currently

contact

the

Insolvency

Service

by

telephone

because

of

coronavirus


What

to

do

You

must

arrange

to

pay

your

tax

bill

with

HM

Revenue

and

Customs

HMRC

if

you

either

miss

a

payment

know

you

can

not

pay

on

time

If

you

pay

a

tax

bill

late

you

must

pay

interest

on

the

amount

you

owe

until

it

’s

paid

off

You

can

avoid

penalties

by

arranging

a

payment

plan

with

HMRC

before

the

tax

is

due

or

by

April

for

Self

Assessment

If

you

owe

Self

Assessment

tax

and

your

bill

is

less

than

you

may

be

able

to

pay

in

monthly

instalments

For

any

other

bills

or

problems

paying

you

must

contact

HMRC

to

discuss

your

options

How

you

contact

HMRC

depends

on

what

you

need

to

pay

This

guide

is

also

available

in

Welsh

Cymraeg

If

you

can

not

pay

because

of

coronavirus

You

may

be

able

to

pay

your

Self

Assessment

tax

in

monthly

instalments

This

includes

any

delayed

deferred

payments

on

account

that

were

due

in

July

if

you

did

not

pay

them

at

the

time

Contact

the

HMRC

coronavirus

helpline

if

you

can

not

pay

any

other

tax

bills

because

of

coronavirus

If

you

’re

self

employed

If

your

business

has

been

affected

by

coronavirus

you

may

be

able

to

claim

a

grant

through

the

Self

Employment

Income

Support

Scheme

If

you

can

not

pay

your

Self

Assessment

tax

bill

You

can

set

up

a

payment

plan

online

to

spread

the

cost

of

your

latest

Self

Assessment

bill

if

you

owe

or

less

you

do

not

have

any

other

payment

plans

or

debts

with

HMRC

your

tax

returns

are

up

to

date

it

’s

less

than

days

after

the

payment

deadline

You

do

not

need

to

contact

HMRC

if

you

set

up

a

payment

plan

Call

the

Self

Assessment

helpline

if

you

’re

not

eligible

for

a

payment

plan

or

can

not

use

the

online

service

If

you

can

not

pay

other

taxes

You

might

be

able

to

set

up

a

Time

to

Pay

Arrangement

with

HMRC

if

you

’re

unable

to

pay

any

other

taxes

in

full

This

lets

you

spread

the

cost

of

your

tax

bill

by

paying

what

you

owe

in

instalments

How

you

do

this

depends

on

whether

you

’ve

received

a

payment

demand

If

you

’ve

received

a

payment

demand

like

a

tax

bill

or

a

letter

threatening

you

with

legal

action

call

the

HMRC

office

that

sent

you

the

letter

If

you

’ve

not

received

a

bill

or

letter

call

the

Payment

Support

Service

PSS

Nominated

partners

in

business

partnerships

can

negotiate

a

Time

to

Pay

Arrangement

with

HMRC

on

behalf

of

the

partnership

or

individual

partners

Before

you

contact

HMRC

You

’ll

need

to

know

your

reference

number

for

example

your

digit

Unique

Taxpayer

Reference

or

VAT

reference

number

the

amount

of

the

tax

bill

you

’re

finding

it

difficult

to

pay

and

the

reasons

why

what

you

’ve

done

to

try

to

get

the

money

to

pay

the

bill

how

much

you

can

pay

immediately

and

how

long

you

may

need

to

pay

the

rest

your

bank

account

details

What

happens

when

you

contact

HMRC

HM

Revenue

and

Customs

HMRC

will

ask

you

about

your

income

and

expenditure

your

assets

like

savings

and

investments

what

you

’re

doing

to

get

your

tax

payments

back

in

order

HMRC

will

decide

whether

you

should

be

able

to

pay

immediately

If

you

can

not

they

’ll

decide

whether

you

’ll

be

able

to

get

your

payments

back

on

track

with

more

time

You

’ll

be

asked

more

in

depth

questions

if

you

’ve

been

given

more

time

to

pay

before

In

more

complex

cases

HMRC

may

ask

for

evidence

before

they

make

a

decision

What

happens

next

You

’ll

have

to

pay

immediately

if

HMRC

think

you

can

when

you

call

You

can

pay

by

Direct

Debit

corporate

credit

card

or

debit

card

over

the

phone

You

’ll

be

charged

a

fee

if

you

pay

by

credit

card

The

fee

is

not

refundable

If

you

can

not

pay

all

your

tax

bill

you

may

be

able

to

pay

your

bill

in

instalments

by

Direct

Debit

get

more

time

to

pay

When

you

might

get

more

time

to

pay

HMRC

may

offer

you

extra

time

to

pay

if

they

think

you

genuinely

can

not

pay

in

full

now

but

will

be

able

to

pay

in

the

future

You

can

set

up

a

plan

to

pay

in

instalments

by

Direct

Debit

on

dates

they

agree

with

you

Tell

HMRC

as

soon

as

possible

if

your

circumstances

change

and

you

can

pay

your

tax

bill

faster

You

’ll

have

to

pay

interest

on

the

amount

you

pay

late

You

must

keep

these

payments

up

to

date

and

pay

your

other

tax

If

you

do

not

HMRC

will

normally

cancel

the

arrangement

and

take

legal

action

against

you

straight

away

When

you

will

not

get

more

time

to

pay

If

HMRC

do

not

think

you

can

get

your

payments

on

track

with

more

time

they

will

not

make

an

arrangement

with

you

they

’ll

expect

you

to

pay

your

tax

bill

straight

away

If

you

do

not

HMRC

will

start

enforcement

action

to

get

the

money

from

you

Help

and

advice

The

Money

Advice

Service

has

more

information

about

debt

management

and

where

you

can

get

free

debt

advice

You

can

also

contact

HMRC

Making

a

complaint

You

can

not

appeal

against

HMRC

’s

decision

but

you

can

make

a

complaint

if

you

’re

unhappy

about

how

you

were

treated


Overview

You

might

be

able

to

claim

tax

relief

if

you

use

your

own

money

for

things

that

you

must

buy

for

your

job

you

only

use

these

things

for

your

work

You

can

not

claim

tax

relief

if

your

employer

either

gives

you

all

the

money

back

an

alternative

for

example

your

employer

gives

you

a

laptop

but

you

want

a

different

type

or

model

This

guide

is

also

available

in

Welsh

Cymraeg

You

must

have

paid

tax

in

the

year

You

’ll

get

tax

relief

based

on

what

you

’ve

spent

and

the

rate

at

which

you

pay

tax

For

some

claims

you

must

keep

records

of

what

you

’ve

spent

You

must

claim

within

years

of

the

end

of

the

tax

year

that

you

spent

the

money

If

your

claim

is

for

the

current

tax

year

HM

Revenue

and

Customs

HMRC

will

usually

make

any

adjustments

needed

through

your

tax

code

If

your

claim

is

for

previous

tax

years

HMRC

will

either

make

adjustments

through

your

tax

code

or

give

you

a

tax

refund

Check

if

you

can

claim

Working

from

home

You

may

be

able

to

claim

tax

relief

for

additional

household

costs

if

you

have

to

work

at

home

on

a

regular

basis

either

for

all

or

part

of

the

week

This

includes

if

you

have

to

work

from

home

because

of

coronavirus

You

can

not

claim

tax

relief

if

you

choose

to

work

from

home

You

may

be

able

to

claim

tax

relief

for

gas

and

electricity

metered

water

business

phone

calls

including

dial

up

internet

access

You

can

not

claim

for

the

whole

bill

just

the

part

that

relates

to

your

work

You

may

also

be

able

to

claim

tax

relief

on

equipment

you

’ve

bought

such

as

a

laptop

chair

or

mobile

phone

How

much

you

can

claim

You

can

either

claim

tax

relief

on

a

week

from

April

for

previous

tax

years

the

rate

is

a

week

you

will

not

need

to

keep

evidence

of

your

extra

costs

the

exact

amount

of

extra

costs

you

’ve

incurred

above

the

weekly

amount

you

’ll

need

evidence

such

as

receipts

bills

or

contracts

You

’ll

get

tax

relief

based

on

the

rate

at

which

you

pay

tax

For

example

if

you

pay

the

basic

rate

of

tax

and

claim

tax

relief

on

a

week

you

would

get

per

week

in

tax

relief

of

Check

if

you

can

claim

Uniforms

work

clothing

and

tools

You

may

be

able

to

claim

tax

relief

on

the

cost

of

repairing

or

replacing

small

tools

you

need

to

do

your

job

for

example

scissors

or

an

electric

drill

cleaning

repairing

or

replacing

specialist

clothing

for

example

a

uniform

or

safety

boots

You

can

not

claim

relief

on

the

initial

cost

of

buying

small

tools

or

clothing

for

work

Personal

Protective

Equipment

PPE

You

can

not

claim

tax

relief

for

PPE

If

your

job

requires

you

to

use

PPE

your

employer

should

either

give

you

PPE

free

of

charge

ask

you

to

buy

it

and

reimburse

you

the

costs

How

much

you

can

claim

You

can

either

claim

the

actual

amount

you

’ve

spent

you

’ll

need

to

keep

receipts

an

agreed

fixed

amount

a

flat

rate

expense

or

flat

rate

deduction

Check

if

your

job

has

an

agreed

flat

rate

expense

Check

if

you

can

claim

Vehicles

you

use

for

work

You

may

be

able

to

claim

tax

relief

if

you

use

cars

vans

motorcycles

or

bicycles

for

work

This

does

not

include

travelling

to

and

from

your

work

unless

it

’s

a

temporary

place

of

work

How

much

you

can

claim

depends

on

whether

you

’re

using

a

vehicle

that

you

’ve

bought

or

leased

with

your

own

money

a

vehicle

owned

or

leased

by

your

employer

a

company

vehicle

Using

your

own

vehicle

for

work

If

you

use

your

own

vehicle

or

vehicles

for

work

you

may

be

able

to

claim

tax

relief

on

the

approved

mileage

rate

This

covers

the

cost

of

owning

and

running

your

vehicle

You

can

not

claim

separately

for

things

like

fuel

electricity

road

tax

MOTs

repairs

To

work

out

how

much

you

can

claim

for

each

tax

year

you

’ll

need

to

keep

records

of

the

dates

and

mileage

or

your

work

journeys

add

up

the

mileage

for

each

vehicle

type

you

’ve

used

for

work

take

away

any

amount

your

employer

pays

you

towards

your

costs

sometimes

called

a

mileage

allowance

Approved

mileage

rates

First

business

miles

in

the

tax

year

Each

business

mile

over

in

the

tax

year

Cars

and

vans

Motorcycles

Bicycles

Using

a

company

car

for

business

You

can

claim

tax

relief

on

the

money

you

’ve

spent

on

fuel

and

electricity

for

business

trips

in

your

company

car

Keep

records

to

show

the

actual

cost

of

the

fuel

If

your

employer

reimburses

some

of

the

money

you

can

claim

relief

on

the

difference

Check

if

you

can

claim

Professional

fees

and

subscriptions

You

can

claim

tax

relief

on

professional

membership

fees

if

you

must

pay

the

fees

to

be

able

to

do

your

job

annual

subscriptions

you

pay

to

approved

professional

bodies

or

learned

societies

if

being

a

member

of

that

body

or

society

is

relevant

to

your

job

You

can

not

claim

tax

relief

on

life

membership

subscriptions

or

for

professional

membership

fees

or

annual

subscriptions

you

have

not

paid

yourself

for

example

if

your

employer

has

paid

for

them

have

paid

to

professional

organisations

that

are

not

approved

by

HMRC

Your

organisation

can

tell

you

how

much

tax

you

’re

allowed

to

claim

back

Check

if

you

can

claim

Travel

and

overnight

expenses

If

you

have

to

travel

for

your

work

you

may

be

able

to

claim

tax

relief

on

the

cost

or

money

you

’ve

spent

on

food

or

overnight

expenses

You

can

not

claim

for

travelling

to

and

from

work

unless

you

’re

travelling

to

a

temporary

place

of

work

You

can

claim

tax

relief

for

money

you

’ve

spent

on

things

like

public

transport

costs

hotel

accommodation

if

you

have

to

stay

overnight

food

and

drink

congestion

charges

and

tolls

parking

fees

business

phone

calls

and

printing

costs

You

may

also

be

able

to

claim

tax

relief

on

business

mileage

Check

if

you

can

claim

Buying

other

equipment

In

most

cases

you

can

claim

tax

relief

on

the

full

cost

of

substantial

equipment

for

example

a

computer

you

have

to

buy

to

do

your

work

This

is

because

it

qualifies

for

a

type

of

capital

allowance

called

annual

investment

allowance

You

can

not

claim

capital

allowances

for

cars

motorcycles

or

bicycles

you

use

for

work

but

you

may

be

able

to

claim

for

business

mileage

and

fuel

costs

You

claim

in

a

different

way

for

small

items

that

’ll

last

less

than

years

such

as

uniforms

and

tools

You

can

only

claim

tax

relief

for

equipment

expenses

if

you

need

it

to

do

your

job

you

use

the

equipment

for

work

and

there

’s

no

significant

private

use

this

includes

using

the

equipment

according

to

your

organisation

’s

policy

If

your

employer

gives

you

money

for

the

item

Reduce

the

amount

you

claim

tax

relief

on

by

the

amount

of

money

your

employer

gives

you

Check

if

you

can

claim


Overview

You

can

save

tax

free

with

Individual

Savings

Accounts

ISAs

In

the

to

tax

year

the

maximum

you

can

save

in

ISAs

is

There

are

types

of

ISA

cash

ISAs

stocks

and

shares

ISAs

innovative

finance

ISAs

Lifetime

ISAs

You

can

put

money

into

one

of

each

kind

of

ISA

each

tax

year

Who

can

open

an

ISA

You

must

be

or

over

for

a

cash

ISA

or

over

for

a

stocks

and

shares

or

innovative

finance

ISA

or

over

but

under

for

a

Lifetime

ISA

You

must

also

be

either

resident

in

the

UK

a

Crown

servant

for

example

diplomatic

or

overseas

civil

service

or

their

spouse

or

civil

partner

if

you

do

not

live

in

the

UK

You

can

not

hold

an

ISA

with

or

on

behalf

of

someone

else

You

can

get

a

Junior

ISA

for

children

under

Opening

and

managing

an

ISA

for

someone

who

lacks

the

mental

capacity

to

do

this

for

themselves

A

close

friend

or

relative

can

apply

to

the

Court

of

Protection

COP

for

a

financial

deputyship

order

to

open

and

manage

an

ISA

for

someone

who

can

not

do

this

for

themselves

In

Scotland

applications

need

to

be

made

to

the

Office

of

the

Public

Guardian

in

Scotland

In

Northern

Ireland

applications

need

to

be

made

to

the

Office

of

Care

and

Protection

How

ISAs

work

There

are

types

of

Individual

Savings

Accounts

ISA

cash

ISA

stocks

and

shares

ISA

innovative

finance

ISA

Lifetime

ISA

You

do

not

pay

tax

on

interest

on

cash

in

an

ISA

income

or

capital

gains

from

investments

in

an

ISA

If

you

complete

a

tax

return

you

do

not

need

to

declare

any

ISA

interest

income

or

capital

gains

on

it

Putting

money

into

an

ISA

Every

tax

year

you

can

put

money

into

one

of

each

kind

of

ISA

The

tax

year

runs

from

April

to

April

You

can

save

up

to

in

one

type

of

account

or

split

the

allowance

across

some

or

all

of

the

other

types

You

can

only

pay

into

your

Lifetime

ISA

in

a

tax

year

Your

ISAs

will

not

close

when

the

tax

year

finishes

You

’ll

keep

your

savings

on

a

tax

free

basis

for

as

long

as

you

keep

the

money

in

your

ISA

accounts

What

you

can

include

in

your

ISAs

Cash

ISAs

can

include

savings

in

bank

and

building

society

accounts

some

National

Savings

and

Investments

products

Stocks

and

shares

ISAs

can

include

shares

in

companies

unit

trusts

and

investment

funds

corporate

bonds

government

bonds

You

can

not

transfer

any

non

ISA

shares

you

already

own

into

an

ISA

unless

they

’re

from

an

employee

share

scheme

Lifetime

ISAs

may

include

either

cash

stocks

and

shares

Innovative

finance

ISAs

include

peer

to

peer

loans

loans

that

you

give

to

other

people

or

businesses

without

using

a

bank

crowdfunding

debentures

investing

in

a

business

by

buying

its

debt

You

can

not

transfer

any

peer

to

peer

loans

you

’ve

already

made

or

crowdfunding

debentures

you

already

hold

into

an

innovative

finance

ISA

If

you

have

questions

about

the

tax

rules

for

ISAs

you

can

call

the

ISA

Helpline

How

to

open

an

ISA

You

can

get

an

Individual

Savings

Account

ISA

from

banks

building

societies

credit

unions

friendly

societies

stock

brokers

peer

to

peer

lending

services

crowdfunding

companies

other

financial

institutions

Contact

your

provider

directly

for

more

information

about

how

to

open

an

ISA

with

them

Withdrawing

your

money

You

can

take

your

money

out

of

an

Individual

Savings

Account

ISA

at

any

time

without

losing

any

tax

benefits

Check

the

terms

of

your

ISA

to

see

if

there

are

any

rules

or

charges

for

making

withdrawals

There

are

different

rules

for

taking

your

money

out

of

a

Lifetime

ISA

If

your

ISA

is

flexible

you

can

take

out

cash

then

put

it

back

in

during

the

same

tax

year

without

reducing

your

current

year

’s

allowance

Your

provider

can

tell

you

if

your

ISA

is

flexible

Transferring

your

ISA

You

can

transfer

your

Individual

Savings

Account

ISA

from

one

provider

to

another

at

any

time

You

can

transfer

your

savings

to

a

different

type

of

ISA

or

to

the

same

type

of

ISA

If

you

want

to

transfer

money

you

’ve

invested

in

an

ISA

during

the

current

year

you

must

transfer

all

of

it

For

money

you

invested

in

previous

years

you

can

choose

to

transfer

all

or

part

of

your

savings

If

you

transfer

cash

and

assets

from

a

Lifetime

ISA

to

a

different

ISA

before

the

age

of

you

’ll

have

to

pay

a

withdrawal

fee

of

Restrictions

on

what

you

can

transfer

You

can

transfer

cash

from

your

innovative

finance

ISA

to

another

provider

but

you

may

not

be

able

to

transfer

other

investments

from

it

Check

with

your

provider

for

any

restrictions

they

may

have

on

transferring

ISAs

They

may

also

make

you

pay

a

charge

How

to

transfer

your

ISA

To

switch

providers

contact

the

ISA

provider

you

want

to

move

to

and

fill

out

an

ISA

transfer

form

to

move

your

account

If

you

withdraw

the

money

without

doing

this

you

will

not

be

able

to

reinvest

that

part

of

your

tax

free

allowance

again

Deadlines

and

complaints

ISA

transfers

should

take

no

longer

than

working

days

for

transfers

between

cash

ISAs

calendar

days

for

other

types

of

transfer

If

you

want

to

transfer

investments

held

in

an

innovative

finance

ISA

ask

your

provider

how

long

it

will

take

If

your

transfer

takes

longer

than

it

should

contact

your

ISA

provider

If

you

’re

unhappy

with

the

response

you

can

take

the

matter

up

with

the

Financial

Ombudsman

Service

If

you

move

abroad

If

you

open

an

Individual

Savings

Account

ISA

in

the

UK

then

move

abroad

you

can

not

put

money

into

it

after

the

tax

year

that

you

move

unless

you

’re

a

Crown

employee

working

overseas

or

their

spouse

or

civil

partner

You

must

tell

your

ISA

provider

as

soon

as

you

stop

being

a

UK

resident

However

you

can

keep

your

ISA

open

and

you

’ll

still

get

UK

tax

relief

on

money

and

investments

held

in

it

You

can

transfer

an

ISA

to

another

provider

even

if

you

are

not

resident

in

the

UK

You

can

pay

into

your

ISA

again

if

you

return

and

become

a

UK

resident

subject

to

the

annual

ISA

allowance

If

you

die

Your

ISA

will

end

when

either

your

executor

closes

it

the

administration

of

your

estate

is

completed

Otherwise

your

ISA

provider

will

close

your

ISA

years

and

day

after

you

die

There

will

be

no

Income

Tax

or

Capital

Gains

Tax

to

pay

up

to

that

date

but

ISA

investments

will

form

part

of

your

estate

for

Inheritance

Tax

purposes

Stocks

and

shares

ISAs

Your

ISA

provider

can

be

instructed

to

either

sell

the

investments

and

pay

the

proceeds

to

the

administrator

or

beneficiary

of

your

estate

transfer

the

investments

to

your

surviving

spouse

’s

or

civil

partner

’s

ISA

this

is

only

possible

if

they

have

the

same

ISA

provider

as

you

Check

the

terms

and

conditions

of

your

ISA

for

details

Inheriting

an

ISA

from

your

spouse

or

civil

partner

If

your

spouse

or

civil

partner

dies

you

can

inherit

their

ISA

allowance

As

well

as

your

normal

ISA

allowance

you

can

add

a

tax

free

amount

up

to

either

the

value

they

held

in

their

ISA

when

they

died

the

value

of

their

ISA

when

it

’s

closed

Contact

your

ISA

provider

or

the

provider

of

your

spouse

or

civil

partner

’s

ISA

for

details

If

your

spouse

or

civil

partner

died

from

December

to

April

Their

ISA

ended

on

the

date

of

their

death

ISA

investments

will

form

part

of

their

estate

for

Inheritance

Tax

purposes

Their

ISA

provider

can

be

instructed

to

sell

the

investments

and

either

pay

the

proceeds

to

the

administrator

or

beneficiary

of

their

estate

transfer

the

investments

directly

to

them

You

can

inherit

their

ISA

allowance

As

well

as

your

normal

ISA

allowance

you

can

add

a

tax

free

amount

up

to

the

value

they

held

in

their

ISA

when

they

died

Contact

your

ISA

provider

or

the

provider

of

your

spouse

or

civil

partner

’s

ISA

for

details


You

’ll

get

a

from

your

employer

when

you

stop

working

for

them

There

’s

a

separate

guide

to

getting

if

you

’re

an

employer

Your

shows

how

much

tax

you

’ve

paid

on

your

salary

so

far

in

the

tax

year

April

to

April

A

has

parts

Part

Part

Part

and

Part

Your

employer

sends

details

for

Part

to

HM

Revenue

and

Customs

HMRC

and

gives

you

the

other

parts

You

give

Part

and

to

your

new

employer

or

to

Jobcentre

Plus

if

you

’re

not

working

Keep

Part

for

your

own

records

By

law

your

employer

must

give

you

a

ask

them

for

one

You

can

check

how

much

tax

you

paid

last

year

if

you

think

you

might

have

paid

too

much

You

do

not

have

a

You

will

not

have

a

if

you

’re

starting

your

first

job

or

you

’re

taking

on

a

second

job

Your

employer

will

need

to

work

out

how

much

tax

you

should

be

paying

on

your

salary

They

may

use

a

Starter

Checklist

to

collect

the

information

or

may

collect

it

another

way

The

Starter

Checklist

has

questions

about

any

other

jobs

benefits

or

student

loans

you

have

It

helps

your

employer

work

out

your

correct

tax

code

before

your

first

payday

Your

shows

the

tax

you

’ve

paid

on

your

salary

in

the

tax

year

April

to

April

You

get

a

separate

for

each

of

your

jobs

There

’s

a

separate

guide

to

getting

if

you

’re

an

employer

If

you

’re

working

for

an

employer

on

April

they

must

give

you

a

They

must

provide

this

by

May

on

paper

or

electronically

You

’ll

need

your

to

prove

how

much

tax

you

’ve

paid

on

your

salary

for

example

to

claim

back

overpaid

tax

to

apply

for

tax

credits

as

proof

of

your

income

if

you

apply

for

a

loan

or

a

mortgage

You

can

check

how

much

tax

you

paid

last

year

if

you

think

you

might

have

paid

too

much

Your

employer

might

give

you

a

copy

of

your

if

they

used

it

to

tell

HM

Revenue

and

Customs

HMRC

about

your

benefits

in

kind

for

example

company

cars

or

interest

free

loans

They

do

not

have

to

do

this

but

they

must

tell

you

how

much

each

benefit

is

worth

There

’s

a

separate

guide

to

getting

form

if

you

’re

an

employer

You

might

not

get

a

if

your

employer

takes

the

tax

you

owe

on

your

benefits

out

of

your

pay

Your

employer

will

write

to

you

to

explain

how

this

works

Lost

PAYE

forms

Lost

You

can

not

get

a

replacement

Instead

your

new

employer

may

give

you

a

Starter

Checklist

or

ask

you

for

the

relevant

details

about

your

finances

to

send

to

HM

Revenue

and

Customs

HMRC

Lost

You

can

get

a

replacement

from

your

employer

You

can

usually

get

a

copy

of

the

from

your

employer

If

they

can

not

give

you

one

you

can

contact

HMRC

for

a

copy