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FAQ: What is the difference between a contribution/donation/distribution for the purpose of the Trust return?

Guidelines in respect of declaring contributions/donations/distributions in the Trust return:
  • A contribution to a trust is normally made by the donor/founder/settlor of the trust (may be thought of as akin to a capital contribution to a company by a shareholder). A contribution can take the form of a donation, but not all donations are contributions. Where a donation is made by the founder/settlor/donor of the trust it should be treated as a contribution. In the context of a trading trust an amount contributed to the trust in exchange for the right to future benefits from the trust must also be treated as a contribution.
  • A donation to a trust refers to amounts paid to the trust by a person (other than the donor/founder/settlor of the trust) in a manner that is gratuitous or with disinterested benevolence (i.e. not in exchange for a right to future benefits).
  • A distribution by a trust refers to amounts vested in the trust beneficiaries.

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