Being a trustee or executor is a responsibility most people take on without fully understanding the tax obligations that come with it. We support trustees and executors across Surrey with the full range of trust and estate tax compliance, from annual SA900 returns and TRS registration to ten-year charges, IHT100 filings and R185 certificates for beneficiaries.
Trusts and estates operate under a separate tax regime from individuals and companies. The tax rates are higher, the filing obligations are distinct and the consequences of errors or missed deadlines fall personally on the trustees and executors rather than on the trust itself. Many people who find themselves in these roles have never previously dealt with this area of tax and do not always realise what is required of them until something goes wrong.
For families across Surrey with assets held in trust, from discretionary family trusts set up for inheritance tax planning to will trusts created on the death of a loved one, the ongoing compliance obligations can be significant. Trusts must register with HMRC's Trust Registration Service, file annual SA900 tax returns, issue R185 certificates to beneficiaries and calculate and pay ten-year periodic charges and exit charges on time. Changes to trustees, beneficiaries or trust assets must be updated with HMRC within 90 days.
We act as accountants to trustees across Surrey, handling the full range of trust tax compliance. We also support executors through the estate administration process, ensuring that all tax returns are filed, inheritance tax is correctly calculated and any income or gains arising during the administration period are properly accounted for. Our goal is to make sure that you fulfil your obligations correctly without needing to become an expert in a highly technical area of tax law.
From the annual SA900 return to ten-year charge calculations, TRS registration and executor support, we handle every aspect of trust and estate tax compliance so that trustees and executors in Surrey can fulfil their obligations with confidence.
We prepare and file the annual SA900 trust and estate tax return for all types of trust, including discretionary trusts, interest in possession trusts, bare trusts and will trusts. We also prepare SA900 returns for estates during the administration period following a death. All supplementary pages are included, income from all sources is correctly categorised and the return is filed by the HMRC deadline.
Annual filingMost UK trusts are required to register on HMRC's Trust Registration Service, whether or not they have a UK tax liability. Taxable trusts must provide full beneficial ownership details. Non-taxable express trusts must register unless a specific exclusion applies. Changes to trustees, beneficiaries or significant trust assets must be updated within 90 days. We handle initial registration and all ongoing updates on behalf of the trustees.
Discretionary trusts are subject to an inheritance tax charge on every tenth anniversary of their creation. The charge is up to 6% of the trust's chargeable value above the available nil rate band. Trustees must file Form IHT100d and pay any tax due within six months of the anniversary. We calculate the charge, prepare the IHT100d, advise on any available reliefs and ensure the filing and payment are made on time to avoid interest and penalties.
IHT chargeWhen assets leave a discretionary trust between ten-year anniversaries, an exit charge may be payable. The charge is calculated proportionally based on the time elapsed since the last ten-year anniversary and the value of the assets leaving the trust. We calculate the exit charge, prepare the required IHT100 filing and coordinate with the trustees on timing where there is any flexibility to minimise the charge.
After each tax year, trustees must provide beneficiaries with an R185 (Trust Income) certificate showing the income paid to them and the tax already deducted by the trust. Beneficiaries need this to complete their personal tax returns and to claim any tax refund they may be entitled to if they pay tax at a lower rate than the trust. We prepare R185 certificates for all income distributions made by the trusts we act for.
When someone dies, the executors become responsible for their tax affairs. This includes filing the deceased's final personal tax return up to the date of death, completing the IHT400 or IHT205 inheritance tax account, paying any inheritance tax due and filing SA900 estate tax returns for income and gains arising during the administration period. We support executors through all of these obligations, working alongside the solicitors handling the grant of probate.
BereavementWhen a trust disposes of an asset, the capital gain is taxed at the trust rate. Trustees receive a reduced annual exempt amount of £1,500. Gains on residential property are taxed at 24% and gains on other assets at 20%. We calculate the trust's capital gains position, claim any available reliefs including principal private residence relief where applicable, and ensure gains are correctly reported on the SA900 capital gains pages.
Trusts set up for vulnerable beneficiaries, such as disabled individuals or bereaved minors, may qualify for special tax treatment that reduces the trust's income tax and capital gains tax liability to the level that would apply if the beneficiary owned the assets personally. We advise on whether a trust qualifies for vulnerable beneficiary tax treatment, prepare the required claims and ensure the trust is taxed at the most favourable rate available.
If HMRC opens an enquiry into a trust's tax return or raises questions about an inheritance tax account, we manage the entire process on behalf of the trustees or executors. We prepare the required responses, provide supporting documentation and, where penalties have been issued, assess whether an appeal is appropriate. Trust and estate enquiries can be particularly stressful for the individuals involved and we take the administrative burden off them entirely.
The tax treatment of a trust depends on its type, which is determined by the trust deed and the rights it gives to the beneficiaries. Each type has different income tax, capital gains tax and inheritance tax implications.
In a discretionary trust, the trustees have the power to decide how much income and capital each beneficiary receives, and when. The beneficiaries have no automatic right to income. This flexibility makes discretionary trusts the most popular choice for inheritance tax planning, but it also means they face the highest tax rates. Income is taxed at 45% (or 39.35% on dividends) in the trust's hands before distribution, and the trustees are subject to ten-year periodic charges and exit charges for inheritance tax purposes.
An interest in possession trust (also called a life interest trust) gives one beneficiary, known as the life tenant, the right to receive all income from the trust during their lifetime. When the life tenant dies, the capital passes to the remainder beneficiaries. Income is taxed at the basic rate in the trust before being treated as the life tenant's income. The trust's assets are generally treated as forming part of the life tenant's estate for inheritance tax purposes, which means they do not attract the same ten-year charges as discretionary trusts.
A bare trust is the simplest form of trust. The beneficiary has an immediate and absolute entitlement to the trust assets and income. Because the assets are treated as belonging to the beneficiary, all income and gains are taxed on the beneficiary personally using their own rates and allowances. Bare trusts are commonly used to hold assets for children until they reach 18, to hold property pending a sale, or as a simple nominee arrangement. There are no ongoing trust-level tax liabilities as such, but the beneficiary's own tax position must still be reported correctly.
A will trust is created by the terms of a will and comes into existence on the death of the testator. The most common forms are discretionary will trusts and life interest (or bereaved minor) trusts. Will trusts are generally excluded from TRS registration for the first two years after death. After that, if the trust continues, it must be registered and maintained like any other trust. The tax treatment depends on the type of will trust created, but the administration period and the ongoing trust period are often handled together as part of the broader estate and trust management process.
Trust tax rates are significantly higher than individual rates. Missing deadlines creates automatic penalties and, in the case of ten-year charges, interest on unpaid tax from the due date.
Whether you have an existing trust that needs ongoing support or have just become a trustee or executor for the first time, we make the handover straightforward and the ongoing compliance manageable.
We review the trust deed or will, assess the trust's income sources and assets, check TRS registration status and identify any outstanding filings or upcoming deadlines that need to be addressed promptly.
We register as the agent for the trust with HMRC, update TRS where required and set up the trust's Government Gateway credentials if needed, so we can manage all correspondence and filings on the trustees' behalf.
Each year we prepare the SA900 trust tax return, calculate any income tax or capital gains tax due, prepare R185 certificates for beneficiaries and flag any upcoming ten-year charge anniversaries or IHT reporting obligations.
We are available throughout the year when trustees have questions, need to report a change, are considering a distribution or need advice on any aspect of the trust's tax position. You are never navigating this alone.
We work with trustees, executors and families across Surrey who are managing the tax obligations that come with trust administration and estate settlement.
Many Surrey families have discretionary trusts set up as part of their estate planning. We provide the ongoing compliance support that keeps the trust fully up to date with HMRC, from annual returns to ten-year charge calculations and TRS updates.
Taking on the role of executor is a significant responsibility. We support executors in Surrey through the full tax aspect of estate administration, from the final personal tax return to the inheritance tax account and any estate income tax returns during the administration period.
Trusts that hold residential or commercial property in Surrey have rental income to report, capital gains to calculate on any disposal and specific compliance requirements around 60-day CGT reporting for residential property sales. We handle all of these correctly.
Families who have set up trusts for disabled or vulnerable family members often need specialist tax advice to ensure the trust qualifies for the most favourable available tax treatment and that the compliance obligations are met correctly each year.
We work alongside private client solicitors across Surrey who are handling probate, trust formation or will drafting on behalf of families who need a specialist trust tax accountant to handle the compliance side of the arrangement.
Trusts holding investment portfolios generate dividend income, interest income and potentially capital gains each year. We prepare accurate SA900 returns for investment trusts of all sizes, categorising income correctly and reporting disposals on the capital gains supplementary pages.
A trust tax return (Form SA900) is the Self Assessment return used to report income and capital gains arising within a trust or estate during administration. Trustees must file an SA900 whenever the trust has taxable income or chargeable gains in the tax year, or when HMRC issues a formal notice to file. The online filing deadline is 31 January following the end of the tax year. Paper returns must reach HMRC by 31 October. Even where trust income is small or covered by allowances, a return must still be filed if HMRC has issued a notice to file, as ignoring it triggers automatic penalties starting at £100.
For 2025/26, discretionary trusts pay income tax at 45% on non-dividend income and 39.35% on dividends above the first £1,000 of trust income. The first £1,000 is taxed at the basic rate of 20% (or 8.75% on dividends). Interest in possession trusts pay at the basic rate of 20%, as the income is generally treated as the life tenant's income. The capital gains annual exempt amount for trusts is £1,500. Capital gains on residential property held in a trust are taxed at 24%, and gains on other assets at 20%. These rates are significantly higher than those applying to individuals, which is why trust tax compliance requires specialist knowledge.
The Trust Registration Service is HMRC's register of trusts. Taxable trusts must register with full beneficial ownership information. Non-taxable express trusts, which are trusts deliberately created by deed or written declaration, must also register unless a specific exclusion applies, even if they have no UK tax liability. Will trusts are generally excluded for the first two years after death. Changes to trustee appointments, beneficiary details or trust assets must be updated within 90 days of the change taking place. We manage TRS registration and all ongoing updates for the trusts we act for across Surrey.
A ten-year charge is a periodic inheritance tax charge imposed on discretionary trusts on every tenth anniversary of the trust's creation. The charge is based on the value of the trust's assets at the anniversary date, after deducting the available nil rate band. The maximum effective rate is 6% of the chargeable value. Trustees must file Form IHT100d and pay any tax due within six months of the anniversary date. Exit charges apply proportionally when assets leave the trust between anniversaries. We calculate both types of charge, prepare the IHT100 filings and advise on any planning steps that may reduce the amount payable.
Executors are responsible for all the tax obligations of the deceased's estate. This includes filing any outstanding personal tax returns for periods up to the date of death, completing the inheritance tax account for the estate, paying any inheritance tax due (which is generally due six months after the end of the month of death), and filing SA900 estate tax returns for income and gains arising during the administration period before the estate is wound up and distributed to beneficiaries. Executors are personally liable for tax that should have been paid by the estate if they fail to meet these obligations, which is why taking professional advice early in the process is strongly recommended.
An R185 (Trust Income) certificate is a document that trustees must provide to beneficiaries after each tax year, showing the income paid to them and the tax already deducted by the trust. Beneficiaries use the R185 to complete their own personal tax returns and to claim any tax refund they may be entitled to if they pay tax at a lower rate than the trust. For discretionary trusts, income is distributed after the trust has already paid 45% tax, and the R185 documents this tax credit. We prepare R185 certificates for all income distributions made by the trusts we act for and ensure beneficiaries receive them in good time to complete their own returns.
We act as accountants to trustees rather than as trustees ourselves. This means we handle the tax compliance side of the trust, including the SA900, ten-year charges, R185 certificates and TRS registration, while the trustees retain legal responsibility for the trust's administration decisions. Many families in Surrey find that having their accountant handle the tax compliance gives them confidence that deadlines are met and HMRC obligations are fulfilled correctly, while they retain full control over trust decisions such as distributions and investment choices. For complex trusts, the most robust arrangement is an accountant handling tax compliance working alongside a solicitor handling the legal administration.
Get in touch for a no-obligation conversation. We work with trustees, executors and families across Surrey and West London from our Kingston upon Thames office. We will review your current position, explain exactly what needs to be done and give you a clear fixed-fee quote for ongoing support.