If you're declaring income obtained from a trust, settlement, or an estate of someone who has passed away, then you’ll need to complete an SA107 form to report this. 

In supplement to your primary SA100 Self Assessment form. Or as part of your tax return if you file using HMRC’s online service/an online accountant. 

This kind of income is firmly under the gaze of HMRC, as under-reporting or omitting it on tax returns is a common type of tax fraud in the UK. 

Failing to properly report income gained from the estate of a person that has died, a trust or a settlement can carry severe penalties. So be sure to be transparent and declare everything that you need to - that’s what the SA107 is for.

Let’s find out what it is and how to use it, so you can stay fully tax compliant.  

Do I need to file an SA107?

You need to file an SA107 (or provide the same information for the same declarations if you file your tax return online )for any of the following forms of income: 

• Beneficiary of a trust/settlement - Filing required if you received or were entitled to income, excluding income from bare trusts.

• Settlor contributions - Necessary if you've contributed money or assets to a trust or settlement.

• Income from deceased estates - Required if you've received income from an estate of someone who has passed away.

• Income from settlor-interested trusts -  Applicable if you're taxable on income arising to trustees where you, as a settlor, have an interest.

• Income to minor children - Essential if your minor children receive income from property you've placed in settlement, and you're taxable on this income.

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How to file an SA107 form

If you file your Self Assessment via paper form, then you can download the and print the SA107 here. 

If you file your Self Assessment online you don’t need a SA107 form, you will find a dedicated section for reporting this type of income when you complete your online tax return. 

However, currently it’s not possible to do this using HMRC’s online service - you have to use approved third-party accounting software to attach an SA107 to your tax return online. We would highly recommend this method as you get an extended filing deadline and it is much quicker and easier.

The easiest way to understand how to use the SA107 form is if we split the process into two parts, with instructions for both completing and submitting/filing the form.

Filling in the SA107 form

The paper form is 2 pages long and consists of 5 main sections, divided into different sub-sections. You can view, read and download the form from HMRC's webpage. There are also a number of ‘help-sheets’ available as well.

Completing the form itself is quite straightforward; answer each question of the 24 boxes (boxes 20 & 21 are not in use). However, understanding the terminology of the form can be quite confusing, so it’s essential to read the ‘Trust ect’ notes to enable you to answer the relevant questions correctly. 

For example, if you’re a beneficiary of a trust declaring trust income you may need to refer to the form ‘R185 (Trust Income)’, a form a trustee used to inform you about your income payments or entitlement from the trust.

Make sure you don’t confuse this version of the R185 with the R185 (Settlor) form which trustees use to tell settlors, ‘’about income arising from a trust in which they retain an interest.’’ 

You may also need to know whether you are a ‘’settlor chargeable on the income arising or paid to another person.’’ 

If all this sounds highly confusing, that’s because it is. 

Which is why we strongly recommend using an accountant to file an SA107 form.

By using Crunch’s Self Assessment service and our HMRC compatible software, the process of completing the SA107 is made simple and easy. All the relevant boxes/questions you need to answer will be presented to you in our automated, user-friendly online form. Based on the information about your income from ‘Trusts etc’ you provide at the beginning.

And if necessary, our expert accountants will guide you through the steps and explain the form’s terminology.

It’s affordable, accurate and efficient, and can save from paying out extra in fines for errors. We’ve already filed over 50,000 Self Assessment tax returns for our client’s so far!

Submitting the SA107 form

If you file a paper version of the form then you need to submit this by post, attached to your SA100 tax return form to:

‍

(If you live inside the UK)

Self Assessment

HM Revenue and Customs

BX9 1AS

‍

(If you live outside the UK)

HM Revenue and Customs

Benton Park View

Newcastle Upon Tyne

NE98 1ZZ

United Kingdom

The submission deadline is 31 October for paper returns, and 31st January for online returns (which must be done via a 3rd party software).

Tips for completing the SA107 form

As this is such an important tax reporting task to get right, we should mention a couple of tips that can help you: 

• Gather all the information and documents you need well in advance.
• Study and understand the niche vocabulary HMRC uses by reading the form and looking up the terms. 
• Double check your figures and calculations. 

Doing the above will ensure that you are as prepared as possible to complete and  submit the form smoothly.

Trust in the form 

In summary, the SA107 form is crucial for declaring income from trusts, settlements, or estates of deceased individuals. It's essential for ensuring transparency with HMRC and avoiding severe penalties for under-reporting. 

Whether filing online or via paper, understanding the form's specifics is key. For ease and accuracy, consider professional accounting services like Crunch's, which simplify the process and offer expert guidance, ensuring compliance and avoiding costly errors.