ANNEX 1:: MINOR CHANGES IN THE LAW MADE BY THE BILL Specific rules for unauthorised unit trusts
In accordance with the general approach, trustees of UUTs will obtain a deduction in calculating net income of the amount of their deemed payments in a tax year (see section 505). Those deemed payments, as now, will be equal to the amount shown in the trustees’ accounts as available for distribution or investment.
They are no longer described as annual payments, because the charge on the recipient of them in Chapter 10 of Part 4 of ITTOIA is distinct from the charge on annual payments in Chapter 7 of Part 5 of that Act. But relevant rules relating to annual payments are applied to unauthorised unit trusts where necessary.
This change will make no difference to the amount of tax trustees of UUTs pay or to how it is collected, as it is in all cases collected through trustees’ self assessment returns at present.
The relief that applies if, in previous tax years, taxable income has exceeded deemed payments will also remain unchanged. But it is now expressed in terms of tax rather than as an amount by which a deemed payment is reduced: see sections 942(3) to (5) and 943.