Dive in depth into the various aspects of how trust income is taxed - from who gets taxed, treatment of capital gains, tests for applying trust losses and more.

In this unit, we cover:

Who gets taxed?
- When there is income to which no beneficiary is presently entitled
- When beneficiary is presently entitled
Present entitlements
- Conditions for a beneficiary to be ‘presently entitled’
- Legislative extensions
- Timing of distribution
- Income variation resolutions
- Specific considerations for discretionary trusts
Trustee distribution minutes
- Reading the deed
- Definitions of income
“Net income” of a trust
Taxing the beneficiary
- Beneficiary presently entitled and not under legal disability
- Beneficiary presently entitled but under legal disability
- Minors
- No beneficiary presently entitled
“Net income” vs “Trust law income”
- How is net income taxed when it differs from trust law income?
- Proportionate vs Quantum approach (Bamford case)
Beneficiary disclaimers of entitlements (Carter case)
Trustee assessments & PS LA 2015/2
CGT and trusts - an overview
Some CGT events relevant to trusts
How to treat capital gains in a trust
- Streaming of capital gains
- Flow through of capital gains - Subdivision 115-C
- Specific entitlements
Trust losses
- Which tests apply to deduct a loss or debt in a trust?
- 50% stake test
- Same or similar business test (SBT)
- Pattern of distributions test
- Control test
- Income injection test

Download resources below.

Date recorded: 14 & 21 November 2024