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Trust and estate tax return notes

​Section 1: Nature of Trust

Please mark the relevant box to indicate the nature of the trust.

Interest in possession trust

An interest in possession trust exists where the person having the interest has the immediate entitlement (subject to any prior claims by the trustees for expenses or other outgoings properly payable out of income) to any income produced as it arises.

Discretionary / accumulation trust

An accumulation / discretionary trust exists where the trustee can accumulate income or pay it at their discretion.

Other

Please state the nature of the trust in the relevant box.

Section 2: Income from which Jersey tax is not deducted

Full particulars should be given of all income receivable by the trust or estate for the year of assessment, subject to a deduction in respect of any income tax paid in the place where the income has arisen.

Executors should include in section 2.3 any income from the deceased’s employment which was paid after they died.

Section 3: Income from which Jersey tax is deducted at source

Enter the amount of income receivable from each source. Include any dividends from Jersey unit trusts and cash dividends if you have a 2% shareholding in the Jersey company. If you have more than a 2% shareholding, cash dividends from Jersey companies must be entered in section 4.

Section 4: Distributions from Jersey companies

From 1 January 2013 new rules were introduced regarding the taxation of distributions from Jersey companies. When the trust or estate receives a distribution you should be provided with the information that you need to correctly complete this section.

If you are unsure of the information you should be entering in this section we recommend that you either seek professional advice or speak to our business tax section.

Information provided by the company making the distribution

If the trust or estate receives a distribution from a Jersey company:

  1. If the distribution took the form of a dividend you may be provided with a dividend
    voucher which provides details of the amount of the dividend and any Jersey tax
    deducted from it; and
  2. You will be provided with the information that analyses the distribution.

Voucher accompanying a distribution

The voucher should show:

  • the gross amount of the distribution
  • the tax deducted from the distribution (if any)
  • the net amount of the distribution

Information that analyses the distribution

The information that analyses the distribution will show the total amount of the distribution the trust or estate received broken down into the following possible categories:

  • taxable under D3
  • exempt under Article 78

How to complete section 4

If an amount is shown as taxable under D3, in section 4 you must:

  1. enter the name of the company and its tax reference number
  2. if any tax has been deducted from the distribution, enter the amount of tax deducted in the
    ‘tax deducted’ column
  3. enter the amount of the distribution received in the ‘gross distribution’ column

If an amount is shown as exempt under Article 78, you do not need to enter anything in this section.

Enter separate amounts on separate lines in section 4.

If the information required to complete section 4 has not been received

The deadline by which companies are required to provide the distribution analysis is 31 December
following the year of assessment in which the distribution was received.

Therefore, if you have not received the information but need to send in the trust or estate return
before the deadline date, you will need to enter an estimate. Complete the information as above to
the best of your knowledge, but enter ‘E’ in the estimated box.

Following the receipt of the relevant information, send it to us at the earliest opportunity.

Information about tax credits and tax deducted from distributions

Tax credits available from the company

In the information that analyses the distribution the company may notify you that tax credits are available for offset against the distribution. The types of tax credit available from a company are:

  • carried through tax credits
  • notional tax credits

Tax credits – deemed distribution / full attribution rules

The trust or estate may also be entitled to a tax credit, if during the trust or estates existence, tax was paid on the company’s profits which are now being distributed under the deemed distribution / full attribution rules that broadly applied from 3 June 2008 to 31 December 2011.

If you determine that a tax credit is available you should provide calculations in support of the tax credit being claimed. It is therefore important to maintain appropriate records in order to claim such tax credits.

The tax credits available from the company (if any) should be added to the tax credit available for tax paid under the deemed distribution / full attribution rules (if any). The total should then be included in the ‘credit for tax not paid by deduction’ column of section 4.

Tax deducted

As noted above, when providing the information that analyses the distribution the company should also provide confirmation of any tax deducted from the distributions made. Any tax deducted should be included in the ‘tax deducted’ column of section 4.

Dividends from Jersey companies (more than 2% shareholding)

Enter the total gross cash dividends (D3) received. Gross means before the deduction of any tax. It is important to enter the Jersey tax deducted as shown on the dividend warrants so that any tax relief can be calculated.

Dividends from non-Jersey companies

For the voidance of doubt, dividends paid by companies based in the UK, Guernsey or elsewhere should not be included in section 4. These dividends should be entered in section 2.2 of the return.

Section 5: Statement of charges payable

Full details of any annuity or other annual charge payable out of the Income of the Trust should be stated, together with the name(s) of the recipient(s). Where any interest is paid net of tax enter the gross amount payable and provide supporting documentation.

Section 6: Names and addresses of each beneficiary

Trustee of interest in possession trust or executor of an estate:

  • state the full name and address of each beneficiary
  • state fractional share, interest or other basis of division of the income to which the beneficiary is deemed to have an interest eg ½, 50% or £

Section 7: Termination of trust or administration of estate

Complete this section if the trust or estate was wound up during the year.

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