TAXATION OF FAMILY TRUST

[Asked by Guest]

pLEASE TELL ME IS THERE WILL BE ANY TAX IMPLICATION IN THE FOLLOWIING TRANSACTION A FAMILY TRUST AT THE TIME OF ITS WOUNDING UP DISTRIBUTE ITS PROPERTY TO ITS BENEFICIARIES.

[Mukesh Kumar]

It is the nature and scope of assets hold by the Trust would help to determine. Where trust was independent and assessabel as such or AOP or otherwise etc.

AI Summary

Taxation of trust distributions: liability depends on asset character and whether the trust is assessed as an association of persons.
Taxation of distributions on winding up of a family trust depends on the character and scope of the assets held and on the trust's tax status; whether the trust is separately assessable or treated as an association of persons influences whether tax consequences arise in the trust or in the beneficiaries.