D02: Flat Managers Trust and Their Taxation - D - Financial Management & Client Companies

Service charge monies held by landlords and their managing agents must be held in “trust” by statute.
The trustees are the landlord or the person named in the lease to whom service charges are payable.
For tax purposes these trusts are classed as discretionary trusts.
Tax is payable on interest earned in these trusts at the rate applicable to trusts.
Managing agents can deduct agreed expenses from the tax payable.

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