I was wondering if someone could clarify this point.
I am working on calculating relevant income pool for an offshore trust.
The trust has direct Uk source income, so it pays UK tax on UK Divs/Interest.
They initially did not do so, therefore a disclosure was made to HMRC and all outstanding UK tax paid from 2001 to 2014/15. Since it was paid late, HMRC has charged interest and penalties.
My question is, in calculating the RI pool, can is the interest & penalties reduce the RI pool?
So far the RI pool has been reduced by income expenses, tax paid on the UK income and Income distributions to beneficiaries.