TSEM8166 - Trust management expenses: 鈥榩roperly chargeable to income鈥�: apportionment and tax: recording and evidence: expense not separately recorded: time records not kept: other documentation
In the absence of time records, there may be other documentation that shows that expenses have been incurred exclusively on income benefit, and can assist with apportionment. This may vary from trust to trust.
Example 8
Invoice states 鈥楢ccountancy services 拢x鈥�. 皇冠体育app accountants have not kept a record of time spent exclusively on income matters for the trust. 皇冠体育app trust accounts prepared by the accountants show a high volume of complex capital transactions; income is bank interest and dividends. 皇冠体育app trustees should decide whether any part of the cost is exclusively for income benefit, by reference to the trust accounts. 皇冠体育app accountants鈥� work on accounting for the bank interest and dividends was relatively light, while their work on accounting for capital transactions was relatively heavy. By reference to the volume and complexity of the various accounts they can apportion the costs to income and capital.
Example 9
Invoice states 鈥楢ccountancy services - tax return 拢x鈥�. 皇冠体育app accountants have not kept a record of time spent exclusively on income matters for the trust. 皇冠体育app tax return includes the core return + y pages CGT, and z pages foreign income. By reference to the return, the trustees see that part of the costs that relates exclusively to income. 皇冠体育appy can apportion an appropriate part of the cost to income.
Example 10
Invoice states 鈥楢ccountancy services - additional tax services 拢x鈥�. In addition to the tax return, the accountants have dealt with a high volume of income transactions, including overseas accounts and claims to Double Taxation Relief; there is a small volume of simple capital transactions that year. 皇冠体育app accountants supply the trustees with a schedule of this work. 皇冠体育app trustees should decide whether any part of the cost is exclusively for income benefit. By reference to the schedule, the trustees can apportion an appropriate part of the cost to income.
Example 11
Invoice states 鈥楢ccountancy service - 拢x property business and 拢y other accountancy services鈥�. 拢x is already taken into account against the rental income. 皇冠体育app trustees have to decide what to do about the other 拢y. 皇冠体育app accountants have drawn up the trust accounts, and have provided tax advice and prepared the trust return. 皇冠体育app accounts and return show rental income, bank interest and dividends; there are no capital transactions, and consequently no CGT pages in the return. 皇冠体育app trustees decide that all the 拢y relates exclusively to income, and charge 拢y to income.
Example 12
Invoice states 鈥楾ax advice 拢x鈥�. 皇冠体育app advisers supply y pages of advice on income tax, and z pages on IHT and CGT. By reference to the advice, the trustees apportion y to income.