PIM4489 | Property allowance: contents: examples: exclusion of property allowance for income from a discretionary trust

Oprah is a beneficiary of a discretionary trust which rents out UK property to generate an income of £1,000 in 2017-18. The trust makes a distribution of £440 to Oprah after deducting tax of £360 (Discretionary trusts are taxed at 45%).

Oprah is not entitled to receive property income from the trust. She is not liable to pay tax on the property income under Chapter 3, Part 3, ITTOIA 05. Oprah is taxable under S493 ITA07.

The gross income of £800 is not relevant property income as defined by ITTOIA05/S783BC.

Oprah is not eligible for the property allowance on this income as ITTOIA05 S783B – 783BQ does not apply.