Information on tax after a bereavement

What is a trustee?

The deceased person may have wished to hold their assets in a trust for a certain time on behalf of a named beneficiary. A trustee manages the assets in the trust until the date specified in the will has been reached. The property will then be handed over to the named beneficiary.

A trustee can only begin managing the assets after the estate has been settled by the personal representative.

If a deceased person placed assets in a trust while they were alive, those assets do not form part of the estate following their death. These assets are held by the trustee for the beneficiary.

As a trustee you must:

  • inform the deceased person’s Revenue office about the trust in case the personal representative has not done so
  • and
  • make sure that any tax is paid on any income or capital gains arising.

Income Tax

Income Tax is due at the standard rate on any income earned from assets in the trust. Beneficiaries can claim a credit for the Income Tax paid by the trust on this income.

You must distribute any of the income earned within 18 months of the year end or there will be a 20% surcharge.

Capital Gains Tax (CGT)

No CGT is due on assets transferred by the personal representative to the trustees. However, if you sell the assets at a later stage there may be CGT due.

The tax is calculated on the increase in value of the asset between the date of death and the date of sale.

Discretionary Trust Tax (DTT)

A discretionary trust is one where there is no immediate benefit to the beneficiary. The trustee manages and distributes the assets in the trust as they see fit.

Further information about DTT can be found in the Gains, gifts and inheritance section.