I am a trustee for a "discretionary trust" set up in my fathers will.
The trust owns my fathers former home and it is let out.
I have been putting 40% of the rental income aside (40% being the
trust tax rate?). I am splitting the remaining 60% 30/30 between
maintainance/admin and 'spendable'.
I now have TWO potential court cases to deal with for the trust - one
against a former letting agent and one possesion claim against the
current Ts who are not paying rent and seem to be damaging the
property beyond 'wear & tear'.
The trust doesn't seem to have enough funds in the 'maintenance' pot
to cover the costs of these actions, so I'm hoping I can raid the
'tax' pot. I know some of the court fees etc are off-set-able against
tax, but don't know how this works. If the fees are (say) £85, does
that mean my tax liability is reduced by £85 - so I can pay it all
from tax - or does it mean my profit is reduced, thus saving £34 tax
which I can take from the tax pot?
- posted 11 years ago