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    Trust chapter

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    Trust detailed tables

     

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    This chapter provides information on trusts, as reported on their trust income tax returns. A trust exists where a person, the 'trustee', is under an obligation to hold property or derive income for the benefit of another person or persons, known as 'beneficiaries'. This obligation usually arises under the express terms of a trust, but may also be imposed by court order or declaration, or by the operation of law. Although the trustees hold the legal title to the property, they must deal with it in accordance with the terms of the trust for the benefit of the beneficiaries.

    Beneficiaries can include public and charitable institutions, and the potential beneficiaries of a discretionary trust can include people not yet born.

    A trust is not a legal entity and generally does not pay tax in its own right. (Note: certain public unit trusts are taxed as companies.) In general terms, it is the beneficiaries who are subject to tax on their share of the net income of the trust.

    The trustee is generally taxed on the proportion of the net income of the trust that is accumulated in the trust or that relates to certain types of beneficiaries (such as those beneficiaries who are under a legal disability). That is, broadly speaking, the trustee is taxed on that part of the net income of the trust for tax purposes that is not assessable to a beneficiary. The net income of the trust is generally assessable to the trustee or the beneficiaries in the income year in which it is derived by the trust.

    An annual tax return must be lodged for a trust, regardless of the amount of income derived by the trust, even if it derives nil income or incurs a loss for tax purposes.

    Overview

    For the 2008-09 income year:

    • 663,392 trusts lodged returns, a 0.5% increase from 2007-08
    • 116,675 trusts had income in the rental, hiring and real estate services industry, representing the largest proportion (at 17.6%) of all industry identified trusts
    • trusts reported total business income of $257.2 billion, an 11.6% decrease from 2007-08
    • total trust business expenses were $289.7 billion, a 2.8% increase from 2007-08.
     
      Last modified: 18 Oct 2011QC 23907