FURBS, RATS
6 April 2009The rates of tax to be applied to the income of FURBS (now EFRBS) continues to be a regular source of confusion. Some of this confusion seems to be borne out a general ignorance of the rule changes in 2006 but the most common source of problems appears to be the substandard guidance displayed on the HMRC website from 2006 through to the end of last year. Having updated the guidance last November, HMRC now seem to be trawling their records for those FURBS trustees who have either under-declared tax for 2006-2007 and 2007-2008 or, just as likely in our experience, not even yet notified chargeability for either tax year.
A quick recap:
Up to 5 April 2006 -Income was taxed only at the lower, basic or ordinary trust rate. Income was exempt from the rate applicable to trusts (RAT) and the dividend trust rate.
From 6 April 2006 -Income is taxed at the RAT or the dividend trust rate.
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