I am looking for some clarity on the new rules that come into affect from 6 April for low income trusts and estates. The new measures provide that trusts and estates with income up to £500 do not pay tax on that income as it arises. However, what will happen when an estate’s administration period spans across several tax years pre and post 6 April 2024. Do both sets of rules apply?
For example, say an estate has £500 of dividend income in each of the tax years 22/23, 23/24 and 24/25.The estate can be treated informally for income tax purposes. For 24/25, there’s no requirement to report or pay tax on the income. However, presumably for the 2 earlier tax years, we still need to report informally and pay the tax due?
Many thanks.