TAXATION OF TRUST,SETTLEMENT AND ESTATE.
SUMMARY OF TAXATION OF TRUST,SETTLEMENT & ESTATE.
ESTATE: Is the total property own by
individual.
TRUST: Is where a title is vested on a person(s) called trustee for the benefit of another
called beneficiary which is created legally.
Settlement: where a sum is set aside for
the benefit of another person.
FORMAT.
1.SUMMATION OF ALL THE INCOME
2.DEDUCT ALLOWABLE EXPENSES=TRUSTEE
FEES,LEGACY,ANNUITY.
3.ARRIVE AT COMUTED INCOME.
4.LESS DISCRETIONARY PAYMENT.
5.ARRIVE AT REMAINDER OF COMPUTED INCOME.
6.ANY DISTRIBUTABLE TO THE AS IN THE DEED.
7.ARRIVE AT TRUSTEE INCOME.
QUESTION.
MAL.MUSA WHO DIED DIRECTED THAT HIS
PROPERTIES SHOULD BE SHARED TO HIS 3 CHILDREN.
OBI,OLU AND ISA.
THE RECORDS OF THE TRUSTEES SHOWS THE
FOLLOWING.
RENTAL INCOME (GROSS) = N1,000,000
TRADING INCOME=1,200,000
DIVIDEND(GROSS)=700,000
INTEREST(GROSS)=500,000
SUNDRY INCOME=420,000
ADDITIONAL INFORMATION.
1. EACH BENEFICIARY IS ENTITLED TO 1/3 SHARE
OF NET DISTRIBUTABLE INCOME(1/2 OF ASSESSABLE INCOME).
2. FIXED ANNUITY = N100, 000.
3. TRUSTEE REMUNERATION IS N80, 000(FIXED)
AND 3% OF TOTAL COMPUTED INCOME.
4. ADMINISTRATIVE AND OTHER
EXPENSES=200,000
5. CAPITAL ALLOWANCE=150,000
6.DISCRETIONARY PAYMENT
OBI=50,000:ISA=50,000:OLU=50,000
COMPUTE THE FOLLOWING.
(A)INCOME TAX PAYABLE BY THE TRUSTEE ON THE
TRUST INCOME.
(B)THE AMOUNT DUE TO EACH BENEFICIARY.
TIPS TO SOLUTION
RENTAL INCOME=1,000,000
TRADING INCOME=1,200,000
DIVIDEND 700,000
INTEREST 500,000
SUNDRY INCOME 420,000
TOTAL INCOME 3820,000 =3,820,000
LESS EXPENSES
TRUSTEE REMUN
FIXED = 80,000
VARIABLE
= 114,600
FIXED ANNUITY 100,000
ADMINISTRATIVE EXP 200,000 = 494,600
COMPUTED INCOME 3,325,400
CAPITAL ALLOWANCE RELIVED 150,000
3175,400
OBI OLU ISA
DISCRETIONARY PYMT 150,000 50,000 50,000 50,000
REMAINDER
OF COMP INC
LESS DISTRIBUTION
TRUSTEE INCOME.
SOLUTION= COMPLETED IN THE CLASS
GET TAX PLANNING TEMPLATE FOR 70,000NGN WHATSAPP 234 8098810999 08067922530
Disclaimer: Obi Azubuike is not by this publication acting as a professional advisers and therefore not liable to any damage whatsoever for your acting or refraining to act based on this publication. Consult your professional for advice.
copyright(c) 2016-Obi Azubuike
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