Receiving payments or assets from foreign trusts

Additional tax liabilities may arise when money or assets of a foreign trust are paid to a taxpayer or applied for their benefit, and they are a beneficiary of the foreign trust.

Additional tax liabilities may arise when money or assets of a foreign trust are paid to a taxpayer or applied for their benefit, and they are a beneficiary of the foreign trust. These can include:

• loans to them by the trustee directly or indirectly through another entity;

• amounts paid by the trustee to a third party on their behalf;

• amounts that are described as gifts from family members, but are sourced from the trust; and

• distributions paid to them or trust assets (such as shares) transferred to them by the trustee.

Taxpayers who receive money from a foreign trust may need to ask further questions to determine whether the amount must be included in their assessable income, including:

• whether they are a beneficiary of the foreign trust;

• where the foreign trust obtained the money; and

• why the money was paid to them, e.g., is it a payment for services, a gift, a distribution or a loan.

Contact our team if you have any questions.