SUMMARY OF TAXATION  OF TRUST,SETTLEMENT & ESTATE.

ESTATE: Is the total property own by individual.

TRUST: Is where a   title is vested on a person(s) called trustee for the benefit of another called beneficiary which is created legally.

Settlement: where a sum is set aside for the benefit of another person.

FORMAT.

1.SUMMATION OF ALL THE INCOME

2.DEDUCT ALLOWABLE EXPENSES=TRUSTEE FEES,LEGACY,ANNUITY.

3.ARRIVE AT COMUTED INCOME.

4.LESS DISCRETIONARY PAYMENT.

5.ARRIVE AT REMAINDER OF COMPUTED INCOME.

6.ANY DISTRIBUTABLE TO THE AS IN THE DEED.

7.ARRIVE AT TRUSTEE INCOME.

                QUESTION.

MAL.MUSA WHO DIED DIRECTED THAT HIS PROPERTIES SHOULD BE SHARED TO HIS 3 CHILDREN.

OBI,OLU AND ISA.

THE RECORDS OF THE TRUSTEES SHOWS THE FOLLOWING.

RENTAL INCOME (GROSS) = N1,000,000

TRADING INCOME=1,200,000

DIVIDEND(GROSS)=700,000

INTEREST(GROSS)=500,000                        

SUNDRY INCOME=420,000

ADDITIONAL INFORMATION.

1. EACH BENEFICIARY IS ENTITLED TO 1/3 SHARE OF NET DISTRIBUTABLE INCOME(1/2 OF ASSESSABLE INCOME).

2. FIXED ANNUITY = N100, 000.

3. TRUSTEE REMUNERATION IS N80, 000(FIXED) AND 3% OF TOTAL COMPUTED INCOME.

4. ADMINISTRATIVE AND OTHER EXPENSES=200,000

5. CAPITAL ALLOWANCE=150,000

6.DISCRETIONARY PAYMENT OBI=50,000:ISA=50,000:OLU=50,000

COMPUTE THE FOLLOWING.

(A)INCOME TAX PAYABLE BY THE TRUSTEE ON THE TRUST INCOME.

(B)THE AMOUNT DUE TO EACH BENEFICIARY.

TIPS TO SOLUTION

RENTAL INCOME=1,000,000

TRADING INCOME=1,200,000

DIVIDEND                 700,000

INTEREST                  500,000

SUNDRY INCOME 420,000

TOTAL INCOME  3820,000                  =3,820,000

LESS EXPENSES

TRUSTEE REMUN

FIXED                 = 80,000

VARIABLE  =       114,600

FIXED ANNUITY                     100,000

ADMINISTRATIVE EXP 200,000   =    494,600

COMPUTED INCOME                         3,325,400

CAPITAL ALLOWANCE RELIVED        150,000

                                                                 3175,400                  

                                                                                                  OBI             OLU         ISA

DISCRETIONARY PYMT        150,000                           50,000        50,000    50,000

REMAINDER  OF COMP INC

LESS DISTRIBUTION

TRUSTEE INCOME.

Disclaimer: Obi Azubuike is not by this publication acting as a professional advisers and therefore not liable to any  damage whatsoever for your acting or refraining to act based on  this publication. Consult your professional for advice. 

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