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.

Note: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.