LE 5Beneficiaries of trusts

1. This section applies when a person who has a tax credit under section LE 1 is the beneficiary of a trust and, in that capacity, derives a dividend with an imputation credit attached.

2. The person’s credit and imputation credit is limited to an amount calculated using the formula—

   $(person\text{'}s\; distributions\; ÷\; trust\; distributions)\times \; (total\; beneficiary\; credits\; -\; person\text{'}s\; supplementary\; dividend).$

   Where:

3. In the formula,—

4. person’s distributions is the total distributions for the tax year made to the person in their capacity as beneficiary of the trust:
5. trust distributions is the total distributions for the tax year made to all beneficiaries of the trust in their capacity as beneficiaries and includes all supplementary dividends paid to them:
6. total beneficiary credits is the total imputation credits attached to dividends and total supplementary dividends for the tax year paid to all beneficiaries of the trust in their capacity as beneficiaries:
7. person’s supplementary dividend is the total supplementary dividends for the tax year paid to the person in their capacity as beneficiary of the trust.

Compare

• 2004 No 35 s LB 1(1)(a), (2)–(3A)

Notes

• Section LE 5(2): amended (with effect on 1 April 2008), on 31 March 2023, by section 88(1) (and see section 88(2) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).