unless you've been renting your main residence out for more than 6 consecutive years, any income-producing activity is ignored and the main residence exmeption applies (so any gains will be cgt-free).

as far as only having one main residence at any one time, you actually get a bit of relief here – the lesser of 6 months or the time taken between the acquisition of the new main residence and ownership of the previous main residence ending. this exemption only applies however, where there was no income-producing activities (so you can't have rented it out then say you say two main residences).

Eve
Tax Accountant

Busy – when t he actual cash is paid, the entry is DR Drawings and CR Cash

I don't know why you would be coding beneficiaries share of profit to drawings, it should be allocated to a "Share of Net profit" account. I guess either way, it'll increase the beneficiary entitlements but technically, only draw-downs of the beneficiary entitlements should be coded to drawings.

generally it's a credit to beneficiary loan accounts (but these should be called "unpaid beneficiary entitlements" to avoid being deemed loans (but that's another issue altogether) and a debit to trust distributions paid. depending on what software you use, the debit entry will vary. the bottom line is – you are aiming to reflect the accounting profit as distributed to the beneficiaries as trusts do not show retained profits like a company does. remember, the trustee is taxed on any undistributed profits at the highest marginal rate.

the accounting entries always reflect the distribution of accounting profit. your taxable distribution is what is distributed in the tax return and what the beneficiaries are taxed on. and yes, a proportional approach is recommended.

hope that helps

Eve

Tax Accountant