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Discretionary Trust Queries

Discretionary Trust Queries

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A solicitor has asked me a number of questions in respect of Discretionary Trusts and the tax treatment on beneficiaries when distributed. First question is If a distribution of capital is made from a discretionary trust does it carry any potential income tax on receipt by the beneficiary? Second question If income received into the trust such as bank interest on an investment within the trust which tax is paid on within the trust is this classed as income or capital on distribution following the tax year in which the income is received by the trust. Third question Is distributed income liable to further potential income tax when distributed to the beneficiary. And fourth question if the trust makes a loan to a beneficiary out of trust assets and this loan is subsequently written off as irrecoverable what are the tax consequences on the beneficiary from an income tax point of view. I trust that these questions are self explanatory. And finally can anyone recommend a book on the subject.

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By courty61
09th May 2014 09:43

4 questions on the same subject in less than day? Not to sound rude but if you are not comfortable with questions on Discretionary Trusts then I would suggest passing it on to someone who is as giving the wrong advice could cost you a lot of money.

There are some decent books on the subject - Tolley's have a decent enough one. But the best way to learn about trusts is to sit an ATT/CTA exam on trusts and estates as the textbooks themselves are quality and give a great basis of practical knowledge.

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