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Homework answers / question archive / The Alberts Family Trust, an inter vivos trust, had the following beneficiaries: Candy (aged 45; entitled to 40% of trust income) Dandy (aged 30; bankrupt; entitled to 35% of trust income) Landy (aged 17; entitled to 20% of trust income) The remainder of each year's income was to be retained or distributed at the Trustee's discretion
The Alberts Family Trust, an inter vivos trust, had the following beneficiaries:
Candy (aged 45; entitled to 40% of trust income)
Dandy (aged 30; bankrupt; entitled to 35% of trust income)
Landy (aged 17; entitled to 20% of trust income)
The remainder of each year's income was to be retained or distributed at the Trustee's discretion. During the 2016/17 tax year trust income was $195,000. A discretionary amount of $7,000 was paid to Landy (this amount was in addition to Landy entitlement under the Trust Deed). The trust also had losses of $15,000 in the 2015/16 tax year. These were to be met out of the trust income. Landy also received interest of $38,000 during the 2016/17 tax year from investments given to him by his parents. Landy is single and is not covered by private health insurance.
l b. Calculate tax payable by the trustee on behalf of Dandy, Landy and the balance of trust net income.
Calculate Tax payable by Trustee on behalf of Dandy:
Calculate Tax payable by Trustee on behalf of Landy:
Calculate Tax payable by Trustee on balance of trust net income:
Calculate Tax payable by Landy only
computation of income to respective persons
Trust income for fy 16-17 =195000$
Trust income for fy 15-16=-15000$
Net income for FY 16-17= 180000$
taxability in various hands for fy 2016-17 of canada
| amount in $ | ||||
| particulars | candy | dandy | landy | trust |
| share | 40 | 35 | 20 | 5 |
| net income = 180000$ | 72000 | 63000 | 36000 | 9000 |
| other income | ||||
| discretion | 7000 | |||
| interest on investments | 38000 | |||
| total income | 72000 | 63000 | 81000 | 9000 |
| taxable income | 72000 | 63000 | 38000 | 9000 |
| mmr | 33% | 33% | 33% | 33% |
| tax liability | 23760 | 20790 | 12540 | 2970 |
note:
1. The income from the intra vios trust to be taxable at top marginal rate of tax
2. assuming the above candidates are residents of canada
3 for FY 2016-17 the top marginal tax rate is 33%
4. the minor only taxable for any interest amount received but not any amount received from the trust
