In this month’s tax spotlight, Danny Cox highlights that a tax liability in trust can arise on several occasions and on multiple parties.
“Tax legislation has developed over the years in a piecemeal way, particularly with regards to the thwarting of tax avoidance routes,” he says.
“As a result a tax liability in connection with a trust can arise on several different occasions, not just on settling the trust. Each of the parties to the trust – the settlor, the trustees and the beneficiaries – may be liable to tax.”
In this detailed guide, Mr Cox analyses the situation for:
• Trust income tax
• Discretionary trusts
• Absolute entitlements
• Life interest trusts
• Bare/absolute trusts
• Trust capital gains tax
He further looks at entitlement to income, impact of residency and standard exemptions. For the complete guide, read the full article here.
