Lending money to a family trust | SomersoftTax issues with family loans | Private Client Tax - BDO8 Trust Loan Questions - Answers for Beneficiaries and Prescribed Rate Loans Using a Family Trust27/08/2019 · Short, simple answer - no. In order to claim any deduction you need to demonstrate that it is helping you earn income. Unless you charge the trust interest, you cannot meet this criteria. In addition, given the trust is discretionary you can't argue that trust distributions received is sufficient "income" to satisfy ;· If the trust is currently a family/living/revocable trust the trustee should be able to obtain a loan from a conventional lender such as a bank or credit union. If the trust is an irrevocable trust the successor trustee will need to contact a irrevocable trust loan lender to obtain ;· As a rule, you cannot claim interest on monies loaned to a family trust unless their is a loan agreement where the trust pays you a commercial rate of interest on the money that you loaned to the trust. Yes, a solicitor is the only person who can prepare legal ;· Once the trust receives the loan proceeds, it will then invest the funds, but must pay mom or dad the 1% interest by January 30th of the following year. Mom or dad must report the interest earned on the loan in their personal income tax return and the trust is entitled to an interest expense deduction for the interest ;· 1. Am I able to lend money interest free to the Trust to get it started from my personal savings ( beneficiary loan) 2. If yes, when I want this money back will it come back to me tax free 3. Do you have to have an Accountant or Tax specialist lodge the tax returns of a Discretionary Trust (assuming no trading in the corporate trustee company & all trust income is distributed to trust beneficiaries & taxed a their marginal tax rates) 4.
