I think the answer here is that the income is not mandated. The Investment Manager is the agent of the Trustees and is collecting in the income and then paying it periodically to the life tenant (whether a fixed monthly amount or the amount on hand at the time of the payment).
If the IM was receiving the dividend and promptly paying it on to the Life Tenant then I think this smacks more of the income being mandated but, even then, there remains the argument that the IM is still acting as agent for the Trustees.
For the income to be properly mandated, it seems to me that each dividend payer must be instructed by the Trustees to pay its dividends directly to the life tenant.
The risk for the Trustees in not reporting the Trust Income to HMRC is a liability for penalties on failure to submit tax returns and failure to pay the income tax on any untaxed income.
Graeme Lindop
Coles Miller Solicitors LLP