Late Payment or Non-Payment of Trust Income Tax

Key requirements

Unless an approved arrangement applies, non-payment can attract 5% penalty. Continued arrears can produce additional 1% monthly penalties under the stated sixty-day trigger, capped at 12% of unpaid tax. IRAS can appoint the estate’s bank, tenant or lawyer to recover tax and can take legal action. A successful later objection can result in recalculation and refund, but waiting for that outcome can incur penalties first. Monitor the notice, account and any approved instalment terms rather than assuming the representative has no payment duty during a dispute.