Trust Income Tax Filing or Form T Filing
Trust Income Tax Filing is required when you set up a trust to manage your wealth. Let us understand what is a Trust and how it works before we discuss further on Trust Income Tax Filing.
What is a Trust?
A Trust is an instrument which creates an arrangement where one party controls and manage another party’s assets, wealth and/or money. It not only states the party who controls and manages the trust, it also states the beneficiaries of the trust and how the trust should be managed.
How many Parties are usually Involved in a Trust Arrangement?
There are usually 3 parties involved in a Trust arrangement:
- Trustor – person who relinquishes his control of assets, wealth and/or money;
- Trustee – person who takes over the control and management of the assets, wealth and/or money; and
- Beneficiary – person who is benefiting or going to benefit from the Trust arrangement.
When it comes to tax filing, the Trustee must submit the Trust Income Tax Return, Form T, to IRAS by 15 April. For an estate of a deceased, the Trustee is the legal personal representative (administrator/executor) of the estate of a deceased. For Trust Income Tax Filing, the Trustee has to apply to IRAS to obtain a valid Form T.
Taxation of Trust Income and Trust Income Tax Filing
Trust Income distributed to the beneficiaries is taxed at the beneficiaries’ level (i.e. the income received from the Trust is added to the beneficiaries’ personal income when IRAS calculates their taxes). The income which remains with the Trust will be taxed at the prevailing Corporate Tax Rate (17% as at Year of Assessment 2016) and Form T has to be filed to report this income.
Tax Efficiency on Trust Income
With proper planning, you can have a more efficient Trust Structure for Trust Income Tax payment. Contact us for a discussion on how to arrange your Trust Structure for optimal tax efficiency.
If you are an employer, you would need to file the Form IR8A and Form IR21 for employees declaring the taxable income and benefits the employees have received.
If you are an employee who can qualify for special treatment like the concession under the Not Ordinarily Resident Scheme, you may wish to get a tax specialist to apply for the concession and file your individual tax return.
Trust Income Tax Filing Service
We have specialists who are trained in filing Trust Income Tax Return as well as other Tax Returns (i.e. Corporate Tax Return, Individual Tax Return and Goods & Services Tax Return). You can have a peace of mind in managing your wealth when we are dealing with the tax issue. Please email us to discuss further on how we can support you in Trust Income Tax Return submission to IRAS.