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.
The following DTT charges apply to trust assets:
- An initial once-off 6% charge.
- An annual 1% charge on 31 December in each year that the trust is in place.
The initial charge of 6% is imposed on the latest of the following dates:
- The date the property becomes subject to the trust.
- The date of death of the disponer.
- The date when all of the principal objects of the trust reach 21 years. Principal objects include the spouse of the disponer, children of the disponer or the children of a predeceased child of the disponer.
The initial 6% charge is payable within four months of the valuation date. The first annual 1% charge will not be payable until following year.
The deceased person may name young children as future beneficiaries of the trust. There are a number of exemptions from the DTT charges. These include trusts that are set up exclusively for:
- people with certain disabilities
- public or charitable purposes
- approved superannuation schemes.
You must complete self-assessment Form IT4 for the 6% and Form IT32 for the 1% DTT and send them to Revenue with the tax due. Interest will be charged on late payments.
Surcharge for late filing
A surcharge applies where discretionary trust tax returns have not been filed within four months of the relevant valuation date. The surcharge which will be added to the tax due is as follows:
- 5% of the tax due to a maximum of €12,695 where the return is submitted within two months of the due date
- 10% of the tax due to a maximum of €63,485 where the return is submitted more than two months late.
Payments of Discretionary Trust Tax
Discretionary Trust Tax (DTT) can be paid by Electronic Funds Transfer (EFT).
You should make EFT payments to:
Capital Taxes No.3 Public Bank Account
Allied Irish Banks
7-12 Dame Street
IBAN: IE32 AIBK 932086 16946049
As soon as you make the payment, email firstname.lastname@example.org with the following details:
- Solicitor's or accountant's name and address.
- Settlor's or disponer's name.
- File reference and name of trust.
- The period covered by the payments.
- The amount of the payment.
DTT can also be paid by cheque or bank draft with the above details to:
The Revenue Commissioners
Capital Acquisitions Tax Unit
Athy Business Campus