Keeping Proper Records & Accounts

Key Requirements

Keep evidence of income derived and distributions to beneficiaries for the required five-year period. The source’s 2020 basis-period example keeps records through 31 December 2025. Trade income requires accounts prepared under accounting standards; rentals need income and expense statements; foreign dividends need supporting vouchers. Retain dates and beneficiary allocations so trustee-level and individual treatment can be reconciled. Filing a return or distributing the assets does not by itself make earlier records unnecessary.

Link Each Record to Its Basis Period

The retention requirement covers both income derived by the estate or trust and distributions made to beneficiaries. Build the file around the period in which the income arose, not simply the date when a tax return was uploaded. IRAS’s example links calendar-year 2020 income to YA 2021 and keeps the records until 31 December 2025. Use the appropriate basis period for another year rather than treating that historical example as a universal disposal date.

A practical income schedule can show the source, gross receipt, associated expense, date received and beneficiary distribution supported by the records. Reconcile cash movements with the underlying entitlement: money paid to a beneficiary should remain traceable to the distribution decision and income records, rather than being treated as proof of a deductible expense merely because it left the trust’s bank account.

Prepare Evidence Appropriate to the Income

The official page distinguishes trade, rental and foreign-dividend records. Trade income calls for statements of accounts prepared according to accounting standards; rental income needs income and expense statements; foreign-sourced dividends need dividend vouchers for submission. Keep those records identifiable by source so a combined bank total does not hide the character of the income. An index of the statements, vouchers and beneficiary allocations is useful preparation for tax enquiries; it supplements the original records and does not replace the required supporting evidence.