Preparing a set of accounts ― accounting conventions and double entry bookkeeping

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

Overview

This guidance note details the basics of double entry bookkeeping and the accounting conventions used to prepare a simple set of trust accounts. It is not targeted at accountants, but at tax advisers who have little or no accounting experience.

Accounting conventions

Accounting date and period

Most trust accounts are prepared annually to each 5 April to match the tax year. This is not set in stone however, and in the unlikely event of a different date suiting the circumstances better, this could be used. Income would still need to be calculated on a tax year basis for the accounts.

Accruals

The extent to which the trustees adopt the accruals basis of accounting will depend on the nature of the assets and income. It obviously makes sense to prepare the accounts on the same basis that is used for tax purposes to avoid time consuming tax adjustments.

Rental income is calculated on an accruals basis. See the Property income guidance note. Remember

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Corporation Tax

Group relief for carried-forward losses

Group relief for carried-forward lossesThis guidance note examines in detail the relief available to groups for carried-forward losses. The scope excludes the treatment of specialist businesses such as banks, insurance companies and oil and gas companies.From 1 April 2017, companies can surrender

14 Jul 2020 11:50 | Produced by Tolley Read more

Personal Tax

Income tax losses ― overview

Income tax losses ― overviewIncome tax losses can arise due to a number of reasons, but not all losses can be relieved against total income and some losses can only be set against certain types of component income. The table below is a summary of the main reliefs for income tax losses.Summary of

04 Mar 2021 12:19 | Produced by Tolley Read more

Corporation Tax

Withholding tax

Withholding taxIntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeUK withholding tax may be reduced under the provisions of a double tax treaty (DTT). Prior to 1 June 2021, payments of interest and royalties made to EU resident associated companies were

14 Jul 2020 14:01 | Produced by Tolley Read more

��˾��ҹ��