UK Trust paying overseas person - can Income tax be claimed?

[saar]

Hello
My friend (UK resident) have just set up a Family Trust with the intention of benefitting some specified charities and family members that need financial help.

The Trust is liable to 50% tax on income and I understand the tax is payable at the end of the year after completing the tax return form.
The family members live in Pakistan and another lives in Bahrain (Pakistan passport holder but working in Bahrain). They have no links with the UK at all (e.g. bank account) and the Trust will send the designated help to them via a bank transfer.

Can someone advise if they are able to claim back any of the income tax on the amount they receive from the Trust e.g. by offsetting a UK personal allowance if they are allowed to have one or not paying any UK income tax because they are not resident in the UK?

Thank you
Saar

[maths]

1. What is the domicile status of your friend?

2. Is the trust a UK resident trust.

3. What are the types and sources of the trust income.

[saar]

Hello, in response:

1. What is the domicile status of your friend?
Non domicile in the UK. i.e. their main home where they live and work are in Pakistan and Bahrain

2. Is the trust a UK resident trust.
I beleive the answer is 'yes' in that the Trust was drawn up in the UK and the UK Tax office has been notified that the Trust has been created (through a Tax form).

3. What are the types and sources of the trust income.
Currently there are two properties that have been transferred into the Trust and are under the ownership of the Trustees on behalf of the Trust. The Trust income will derive from rental of the properties, minus any property maintenance and costs related to the running of the Trust.

Hope this helps.
Thanks
Saar

[maths]

The appointment of trust income to a non-resident beneficiary carries with it a 50% "credit".

This credit is potentially repayable if the recipient's income tax liability in the UK is below 50% (eg 40% or 20% or nil).

[saar]

Great. So your response does indicate that there is a potential for claiming Tax back. As the people are non resident in the UK and don't have any other income arising from the UK, I believe they have the maximum allowable tax free band.

I am also assuming that each individual is responsible for filling in a tax form at the end of the year (I don't know if the lack of a National Insurance number is an issue).

For clarification, at the end of the Tax year, would the Trust pay the tax via it's tax returns and then the individual via their tax returns, seek to get a credit?

Thank you
Saar