A discretionary trust has made a number of loans to the beneficiaries and loan agreements have been signed. The trustees now wish to close the trust down and distribute the monies to the beneficiaries. Firstly do these loans need to be repaid into the trust before the trust can be closed down or can the loan monies be reassigned as monies due to the actual beneficiaries that are due to receive them without the need for repayment of the loan. What are the tax consequences of the loans been written off by the trust for both the trust itself and the individual who received the loans. Any relevant tax legislation would be useful for further research.
1st Apr 2022
Loans Made out of Discretionary Trusts-
A discretionary trust wishes to be wound up but there are loans made to beneficiaries.
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