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LE 4: Trustees for minor beneficiaries
or “Special tax rules for trustees managing income for young beneficiaries”
You could also call this:

“How trustees' tax credits are treated when close companies receive trust income”

When you’re the trustee of a trust and you have a tax credit under [section LE 1], this rule applies if a close company gets beneficiary income from the trust. A close company is a type of company with only a few shareholders.

If [section HC 38] applies to this situation, you’re treated as if you’re getting the company’s beneficiary income as a beneficiary yourself. This means the law sees you as receiving the income directly, even though you’re actually the trustee.

This rule is important because it changes how the tax credit is handled when there’s a trust and a close company involved.

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Next up: LE 5: Beneficiaries of trusts

or “How tax credits work for trust beneficiaries receiving dividends”
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Part L Tax credits and other credits
Tax credits for imputation credits

LE 4BTrustees for certain close companies

  1. This section applies when a person who has a tax credit under section LE 1 (the tax credit) is the trustee of a trust and a close company derives beneficiary income from the trust.

  2. To the extent to which section HC 38 (Beneficiary income of certain close companies) applies, the person is treated as deriving the company’s beneficiary income as a beneficiary.

Notes
  • Section LE 4B: inserted, on , by section 104(1) (and see section 104(2) for application) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).