From: Donna L
>"Secondly, the trust allows
>you to pay other expenses and
>claim them as a tax deduction
>so hat you can live quite well
>and pay little or no tax."
The trustee pays your personal expenses
before tax rather than you paying them
from after tax dollars.
Still not quite sure I understand this Dale.
Let's say family trust owns property and
earns $20,000 k in rent a year. $10,00
goes in interest etc. and the remaining
$10k pays one of the beneficiary's rent,
medical expenses, whatever. Isn't the
$10,000k used to pay personal expenses
counted as a "distribution" to the
beneficiary in the end of year wash-up
and therefore the beneficiary will pay tax
on it at marginal rate of tax? With my
family trust which has earnings from rent,
shares and some business income (no
salary is drawn) the expenses are all
deducted from earnings but my
accountant says I have to "reimburse" the
Trust each year for my personal use of
car, phone expenses etc. Is this
incorrect? I think this was how Alan Bond
did it, i.e. Trust owned everything and paid
all his expenses but at the end of the day
isn't the Trust provision to him his
"income" which should be taxable???
Donna L
>"Secondly, the trust allows
>you to pay other expenses and
>claim them as a tax deduction
>so hat you can live quite well
>and pay little or no tax."
The trustee pays your personal expenses
before tax rather than you paying them
from after tax dollars.
Still not quite sure I understand this Dale.
Let's say family trust owns property and
earns $20,000 k in rent a year. $10,00
goes in interest etc. and the remaining
$10k pays one of the beneficiary's rent,
medical expenses, whatever. Isn't the
$10,000k used to pay personal expenses
counted as a "distribution" to the
beneficiary in the end of year wash-up
and therefore the beneficiary will pay tax
on it at marginal rate of tax? With my
family trust which has earnings from rent,
shares and some business income (no
salary is drawn) the expenses are all
deducted from earnings but my
accountant says I have to "reimburse" the
Trust each year for my personal use of
car, phone expenses etc. Is this
incorrect? I think this was how Alan Bond
did it, i.e. Trust owned everything and paid
all his expenses but at the end of the day
isn't the Trust provision to him his
"income" which should be taxable???
Donna L
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