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Company paying into a discretionary trust

  • 12-05-2018 8:22pm
    #1
    Heisenburg81
    Closed Accounts Posts: 322 ✭✭


    Say a company pays funds into a discretionary trust.
    Trust established by will of a parent of the company director a number of years earlier.
    All principal objects of the trust are over 21 etc and annual levy being charged.
    The Director is one of the principal objects of the trust and he controls the company.

    The new funds entering the trust will be subject to an initial levy of 6%.

    Aside from the trust levies, what way would the payment by the company to a trust be treated?
    Is it simply a debit to the directors account, whereas if it was a withdrawal to a shareholder (non director) it would be a distribution?
    CATCA covers situations where a company itself is in trust but I can't find a section covering a payment by a company into a trust.


Comments

  • #2
    tanit
    Registered Users, Registered Users 2 Posts: 325 ✭✭tanit


    I'm not at your level, but in my opinion the company is not making the payment is the director who is making the payment via the director's control account, all this considering the director is alive. In this case if the account is in credit there will not tax consequences but if the director's account is debit is either salary or a distribution.

    If the director is not alive the estate should have been distributed and in this case is plain income tax on the side of the trust.

    That's what it looks to me, but I can be hugely wrong.

    Very interested in this :)


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