A client who is divorced is now in a new relationship. He has a trading company and holds some shares within a trust which he is the settlor of. If he appointed a life interest over a share in the trust to his partner's child and paid out a dividend e.g. to pay the child's school fees would the dividend be taxed on him or the child?
The child is not his and he has no interest in the trust.
Would the answer be different if the partner and child moved in with him?
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Would the answer be different if the partner and child moved in with him?
2 responses jump to mind, depending on your attitude:
1. Nothing like a good old bit of family restructuring as a method of tax planning!
2. What a romantic way of asking them to move in.