Clarification on Tax Implications for Trust Loan Repayment

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 · Accepted Answer

Bruce4Tax · Answer

You and your accountant need to consider the distribution minute required before 30/06/2025. If the minute distributes the whole 100 K, then beneficiaries will be assessed on that. If the minute distributes only 30 K to B2 and retains 70 K undistributed, then B2 will be assessed on 30 K and the trust will be assessed on 70 K at 47% tax rate. If the minute distributes 70K to B1 and 30 K to B2, then B1 will be assessed on 70 K and B2 will be assessed on 30 K. Taxable income comes from the trust distribution minute - not from movements of cash.

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