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Explaining the important concepts
Learn about the formation of a trust or estate, the information that we must receive, the trusts income and complying trusts (formerly qualifying trusts).
A trust will usually earn income from the money or property settled on the trust. The money or property is used as an investment to earn further revenue, or as capital to fund a trading operation. This revenue becomes the trust's income as it is earned. The initial settlement on the trust is not income for tax purposes, but the settlor may have to pay gift duty on it, depending on the value of the settlement.
Generally, if a trust's expenses are greater than its income it will have a loss for tax purposes.
To create a trust, a person (the settlor) gives money or property to another person (the trustee), to be held in trust for the benefit of either the trust's beneficiaries, or a purpose recognised by law.
Information that must be provided to us if all trustees are non-residents or become non-residents.