Taxation of trusts and beneficiaries

A trust is a “person” and a taxpayer for income tax purposes. As a result, it will be subject to income tax on its taxable income for a taxation year. In turn, if some or all of the trust income for the year is “paid or payable” to a beneficiary of the trust, the trust can generally deduct that amount from income and the beneficiary will normally be taxed on the income instead.

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