Good afternoon
I'd be grateful if anyone has any views on the following.
I'm a trustee of a life trust. Income from investments is paid directly to the beneficiary by the investment manager as it arises. This is to avoid the trust having to file a tax return.
However, the investments now include some accumulation units of a unit trust, where dividends are automatically reinvested - so there is no cash distribution to the beneficiary. I know that income tax is nevertheless due on these reinvested dividends, just as it would be if the income were to be paid out. But does the fact that no cash is paid out to the beneficiary mean that this income can't be regarded as received by the beneficiary, and hence the trust will have to declare them?
thanks
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