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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