Tax for UK resident beneficiaries on capital payments from non-resident trusts on or after 6 April 2025

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

This guidance note explains the rules for capital payments to UK resident beneficiaries from non-resident trusts where the payment was on or after 6 April 2025. It only applies to trusts which are not settlor interested. The rules for settlor interested trusts are explained in the Tax on UK resident settlors of non-resident trusts (6 April 2025 onwards) guidance note.

The abolition of domicile as a concept for inheritance tax and the remittance basis from that date means that new rules apply for distributions from 6 April 2025 onwards. For changes to domicile impacting remittance basis users, see the Abolition of the remittance basis from 2025/26 guidance note.

Introduction

Payments made by a non-UK resident trust to UK resident beneficiaries are governed by a series of ‘tax hierarchy’ rules, which govern the tax treatment of the amounts received by the beneficiary. See the Tax on UK resident beneficiaries of non-resident trusts (overview) guidance note.

The first step is to determine

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