Non-australian citizen beneficiaries for discretionary trusts

[eggnog]

Is it even possible to have non citizens as beneficiaries of discretionary trusts. If so how would the proceeds be distributed to them? How would they be taxed?

 

[spludgey]

I'm assuming that you don't mean non-citizen, but non-resident?

I'm asking because I was under the impression that non-citizens could be a beneficiary of a trust.

 

[eggnog]

No typo. I did mean non-citizens.

I emigrated to Australia with my parents and am now an Australian citizen. My parents consistently give money to relatives overseas on a monthly basis to help support them. I was wondering, if we had a family trust can the proceeds be distributed to these family members.

 

[Terry_w]

Yes non residents could be beneficiaires. Trustee will be required to without tax, or be personally liable.

 

[eggnog]

Thanks for the answer Terry. Excuse my ignorance but would the non-citizen beneficiary have to lodge an australian tax return? If not then how does the ATO determine the tax percentage to be imposed on the withholding amount.

 

[Terry_w]

Thanks for the answer Terry. Excuse my ignorance but would the non-citizen beneficiary have to lodge an australian tax return? If not then how does the ATO determine the tax percentage to be imposed on the withholding amount.

Citizenship doesn't really matter. It is tax residency that matters and this may be different to immigration definitions of residency.

Withholding tax will vary depending on the income. Whether they lodge a tax return will also depend on the type of income and if withholding tax has been withheld properly.