Trust Tax

A trust is created by “declaration of trust” on property of the trust or bypayment of settlement of money by a person called the “settlor” to the personcalled the “trustee”, to deal with trust funds as provided in the deed of settlement. Care should be taken that Settlor of a Discretionary Trust is an independentperson. Settlor cannot be a trustee and cannot be a beneficiary of the trust and nor his spouse or children be beneficiaries. A trustee of trust or a beneficiary cannot act as settlor. The settlor is usually a friend or accountant who helps the client to establish the Discretionary trust. The settlor has no right to income or capital of the trust assets and once the settled sum has been paid by the settlor and trustdeed has beenexecuted, it will have no further role in the trust.

Appointer The appointor can remove / replace trustee. The appointor in “de facto” controls the trust, since, if the trustee does not follow the appointor’s directions, the appointor can simply remove the trustee and appoint another trustee. Although You can have a trust without an appointor, but to handle the situations like those arising from the death or insolvencyof trustee(s), naming an appointor is considered advisable.