SolvedTSEM5620 | Trusts for particular purposes: compensation under ESC A68 - example using dividend income - years to 2009-2010
From HM Revenue & Customs · Trusts, Settlements and Estates Manual
The trustees must meet the conditions of the concession (TSEM5610).
This is how to calculate relief on dividend income.
| Income and tax rates | Amount | Total |
|---|---|---|
| Tax pool brought forward | - | Nil |
| Dividend received | £90,000 | - |
| Tax credit | £10,000 | - |
| Gross income | £100,000 | - |
| Tax due on standard rate band (10%) | £100 | £100 |
| Tax due at (dividend trust rate) (32.5%) | £32,175 | £32,175 |
| Less non-payable tax credit | - | £10,000 |
| Income available for distribution | £67,725 | - |
| Total tax pool | - | £22,275 |
| Amount distributed subject to PAYE | £67,725 | - |
The compensation payable to trustees is the lesser of