Discretionary Trust Tax (DTT)

Initial once-off 6% charge

The initial 6% charge is imposed on the market value of the trust assets at the latest of the following dates:

• 25 January 1984
• date the property becomes subject to the discretionary trust
• date of death of the disponer
• or
• where there are principal objects of the trust, the date on which the youngest principal object:
  
  • attains 25 years of age, where the property became subject to the trust between 25 January 1984 and 31 January 1993
  • or
  • attains 21 years of age, where the property became or becomes subject to the trust on or after 31 January 1993.

Principal objects are the:

• spouse or civil partner of the disponer
• children of the disponer, or the disponer's civil partner
• children of a predeceased child of the disponer
• children of a child of the disponer's civil partner, where such child predeceased the disponer
• children of the civil partner of a child of the disponer, where such child predeceased the disponer
• or
• children of the civil partner of a child of the civil partner of the disponer, where such child predeceased the disponer.

Children can be named as future beneficiaries of the trust.

When to pay and file

The initial 6% charge is payable within four months of the relevant valuation date. The trustees must complete a self-assessment Form IT4 for the 6% Discretionary Trust Tax (DTT) and send it to Revenue with the tax due.

Note

There is a surcharge for late filing of the Form IT4 and interest will be charged on late payments.

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