Unit Trusts Guide
What about tax?
Under current legislation, income is paid to investors
net of tax. Dividend income is paid net of 10% tax.
Both lower and basic rate taxpayers are deemed to have
met their liability and have no further tax to pay. Non
taxpayers cannot reclaim a refund of tax deducted. Higher
rate taxpayers will have an additional liability of the
difference between tax charged and their higher rate of
tax.
Distributions from non equity unit trusts are normally
taxed as interest. For interest distributions, 20% tax is
deducted at source. Non taxpayers cannot reclaim a refund
of tax deducted. Lower and basic rate taxpayers have no
further liability. Higher rate tax payers will have an additional
liability of the difference between tax charged and the
higher rate of tax.
Authorised unit trusts are exempt from taxation on capital
gains within the trust. However when an investor disposes
of units or dies, there may be a liability for capital gains
tax.
