Proposed increase in the trustee tax rate to 39%
The Government has proposed that from the 2024/25 income year, the tax rate applying to trustee income will increase to 39% to align with the top personal tax rate. These changes were included in the Taxation (Annual Rates for 2023-24, Multinational Tax, and Remedial Matters) Bill introduced on 18 May 2023. The proposals in the Bill are not legislation until enacted and are subject to change through the parliamentary process.
Since the increase in trustee tax rate was proposed, Inland Revenue has been asked to provide guidance around how it may perceive some taxpayer transactions and structural changes. This article is intended to provide high-level guidance based on Inland Revenue’s interpretation of the current law.