Discretionary Trust Tax (DTT)

Overview

Discretionary Trust Tax (DTT) is a tax on property held in certain discretionary trusts.

A discretionary trust is one where there is no immediate benefit to the beneficiary. The trustee(s) manage and distribute the property in the trust subject to the powers conferred by the deed or will.

For the purposes of DTT, beneficiaries of the trust are called objects of the trust. An object of a discretionary trust may include named beneficiaries or members of a class of beneficiaries, for example the grandchildren of the disponer.

If you settle property into a discretionary trust during your lifetime, and are resident or ordinarily resident in Ireland, you must complete a Form DT1. The completed form must be submitted to Revenue within four months of the date you settle property into the discretionary trust.

DTT is payable by the trustees, the trustees may engage an agent to act on their behalf in this regard.

The following DTT charges apply to property held in the trust:

• An initial once-off 6% charge applies to the market value of all the property held in the trust.
• An annual 1% charge applies on 31 December each year to the market value of all the property held in the trust on that date.

Note

The disponer (also known as the settlor) is generally the person who provided the property in the trust. If more than one person provided property, each person is the disponer in respect of the property that he or she provided. 

Next: Initial once-off 6% charge