A new client is the life tenant of a trust. Most of the trust income is rent but there is some element of dividend income (a lot less than £5,000).
The trustees are deducting tax at 20% from all the income including dividends and paying it over to HMRC.
The previous accountant have entered all the income from the trust as trust income o the tax return and it has all been taxed - with no nil rate band for dividends.
Is this correct? Is there a better way to do it - ie making use of the nil rate dividend band?