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Income from trusts, settlements or estates is taxed as normal. Some of the income will be taxed as savings income or as dividends and some of the tax credits received may be non-taxable. Legacies are not taxable.
From 2000-01 onwards this no longer applies as any payments allowed will be under the new rules.
Where an agreement was made prior to 15/3/88, the income is taxable (old rules payments). Maintenance payments made under the new rules (made on or after 15/3/88) are not taxable and should not be entered.
If the old rules maintenance payment is less than the basic level of married couple's allowance (£1,970 in 1999-2000) there is no tax to pay. If it exceeds the basic MCA, the basic MCA is deducted from the taxable amount.
The full amount, the exempt amount and the net amount taxable must be entered on the tax return.
If additional voluntary contributions (AVC) have been made that are subsequently refunded due to a surplus payment, the refund is taxable. (The original payment would have benefited from tax relief). However the refund of the surplus AVC is paid after deduction of basic rate tax and that tax may not be refunded if the taxpayer's income is below the basic rate tax threshold.
A refund of contribution paid into a pension scheme due to the person leaving the scheme within two years of joining is not taxable.
This is the section that picks up the dregs of the taxation system! Some of the types of income in the IRIS list are taxed at 20% and are therefore covered by the rules for savings income (interest). All the rest of the income in this section is taxed as 'normal' income and a list of the types is given by the main help file for any other income.
