Trusts

Question 1

IIP-Definition

Answer 1

• When the benefit recevier has an absolute right to the income from the trust.

Question 2

IIP-treatment

Answer 2

• Gross up income 100/90 and tax like a dividend.
• If interst or income, gross up 100/80
• Also get 10% tax credit to reduce the IT liability

Question 3

DT -definition

Answer 3

• Where the trustees retain the right to pay out the income at their ‘discretion’

Question 4

DT-treatment

Answer 4

• Gross up income 100/55.
• Tax as income
• Tax credit of 45%