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Income Tax

This category contains 5 posts

How clear is that bright-line?

The idea behind the “bright-line” test is a clear rule that provides with limited exceptions (the most important one for most people relating to the sale of the family home) sales of residential property within two years of acquisition will be taxable. However, what comprises an acquisition or a disposal is not always entirely obvious.  For example, consider the … Continue reading

Taxation of Trusts ed 3

  The taxation of trusts is a dynamic and ever-changing landscape. The third edition of Taxation of Trusts published this week (September 2016) has been up-dated to incorporate recent case law developments and legislative amendments.  The text also considers the application of FATCA to trusts and proposed new reforms to the disclosure rules and closely … Continue reading

To be very clear

While foreign trusts are getting some headlines, it is useful to bring attention to a small amendment to the complying trust election regime where a trust can elect to be a complying trust. The Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 has amended ss HC 10 and HC 33 … Continue reading

Favouring beneficiaries on a lower tax rate

Inland Revenue has issued a QWBA (QB 15/11)  regarding whether a trustee exercising a discretion to distribute trustee income (that would be taxed at the trustee rate of 33% if retained by the trustee) to a beneficiary on a lower tax rate, a beneficiary with tax losses or a beneficiary to whom the income will … Continue reading

Corporate trustees are not always the answer

Corporate trustees are an increasingly common feature of modern discretionary trusts.  As the increasing risks of trustee liability become more apparent, it can only be presumed that the use of corporate trustees will continue to increase. However, corporate trustees are not an absolute panacea and it is important to appreciate that the structure of any … Continue reading