Malcolm Finney examines precisely what constitutes mandated trust income.
Typically, income tax is levied on persons who are entitled (i.e. beneficially) to income but it may also be levied on persons who may not be entitled to income but are in receipt of it. For example, ITTOIA 2005 s. 8 provides, “The person liable to any [income] tax charged under this Chapter is the person receiving or entitled to the profits” (see also ITTOIA 2005 s 271).
Interest in possession trusts
The income tax treatment of trustees of interest in possession trusts is different from trustees of discretionary (and accumulation) trusts. With respect to trustees of trusts with an interest in possession, there is no distinction between qualifying interests in possession and non-qualifying interests in possession (unlike with respect to inheritance tax). An interest in possession is an
