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Who pays what when considering settlor-interested discretionary trusts, and who is repaid what?
KEY POINTS
- Comparing the settlor’s tax repayment with the tax paid by the settlement.
- Completing income and tax details on the form R185.
- Settlement income is charged on the beneficiary as if it had been directly received.
- Is there an argument that the income should simply be declared and taxed on the settlor’s tax return?
- Does a discretionary power mean that income must be trust income?
I am sure that I cannot be the only one who has ever struggled over a tax calculation.
However having spent some considerable time trying to get my head around this latest problem: the amounts that appear on a form R185 and in the tax return of the settlor. I believe I have cracked it.
And because the social networking trend...
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