Updated 21/10/2025: Information added on multiple trusts
This article has been updated to clarify the position where a person has settled more than one trust.
In its latest trusts and estates newsletter, HMRC has reminded agents about the changes made for 2024/25 onwards to the £500 tax-free allowance available to estates and trusts, and has warned that mistakes are being made.
Tax years up to and including 2023/24
Where an estate only had savings income during the whole period of administration and the total income did not exceed £500, income tax was not charged on the savings.
2024/25 and later years
The new £500 allowance applies separately for each tax year when the estate is in administration and is available for all types of income. If the estate’s income in any tax year is over £500, all the income is taxable, not just the excess over £500. Where the £500 is not used in full in one tax year, the unused balance cannot be carried forward to later years.
Multiple trusts
The £500 allowance for an estate is separate to the £500 allowance that is available for trusts. Trusts created by the same settlor may need to split the £500 allowance between them. This is done by entering the number of other trusts in box 9B.1 on the SA900 tax return. The guidance for this can be found on page 19 of the tax return guide.
HMRC has received incorrect calculations from non-complex (or simple) estates that are using the informal arrangement method. This involves sending a letter to HMRC to notify them of any income tax and capital gains tax liabilities, rather than completing an SA900.
Further information
How to complete your tax return
Our 10-part weekly series ICAEW highlights some of the key things to keep in mind when completing a tax return for 2024/25.
The Tax Faculty
ICAEW's Tax Faculty is recognised internationally as a leading authority and source of expertise on taxation. The faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.
Further resources
Latest news
TAXwire and Tax Track
Stay up to date with the latest developments by signing up to the Tax Faculty's weekly enewsletter and listening to the Tax Track podcast series.
Listen now Newsletter sign upPractical guidance
Tax Faculty resources
The Tax Faculty offers expert guidance and support enabling you to provide the best advice on tax legislation to your clients or business. We offer clear direction in taxing times. Membership is open to everyone.
ICAEW support
Training and events
Browse upcoming and on-demand ICAEW events and webinars focused on developments in tax practice and policy.
Events and webinars CPD courses and more