TSEM3771 | Trust income and gains: beneficiaries: beneficiary entitled to trust income - trust that trades or has rental income - business expenses

If the gross trust income is £10,000 and there are allowable trading or rental business expenses for tax purposes of £2,000, the trustees are taxable on the net profit of £8,000, as being in receipt of the net income. See TSEM3761.

The interest in possession (IIP) beneficiary is entitled to the income of the trust (not to receipts). In this context the trust income is £8,000 not £10,000, so the measure of the beneficiary's income is £8,000.