HMRC pursues trustees who made index-linked loans to spouses

What are people’s views of the following issued in the latest HMRC Estates and Trusts’s newsletter?

TRUSTS: HMRC pursues trustees who made index-linked loans to surviving spouses

HMRC plans to invite trustees to settle income tax liabilities resulting from repayment of an index-linked loan they made to a beneficiary, typically the surviving spouse in the context of a nil-rate band discretionary trust. HMRC says it regards the index-linked element as interest subject to income tax in the hands of the trustees. It will issue closure notices to trustees who choose not to settle, and will defend any resulting appeals.

Penny Munro
Farnfields