Question Tag: Beneficiaries

Search 500 + past questions and counting.

  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

  • 15 Marks

TAX – May 2015 – L2 – SC – Q7 – Taxation of Trusts and Estates

Determine computed income of a trust, tax liabilities, and apportionment of income among beneficiaries.

Chief Zeta created a Trust many years ago for the benefit of his four children, Alpha, Beta, Cepha, and Delphi. A lawyer was appointed as the Trustee to his Estate.

For the year ended 30 September 2014, the Trust income amounted to ₦3,120,000. Each of the beneficiaries receives an annuity of ₦150,000 every year while the expenses incurred on the administration of the Trust was ₦57,500 per annum. The trustee is on a remuneration of 2% of the Computed Income.

Chief Zeta instructed that discretionary payments of ₦22,500, ₦17,500, ₦15,000, and ₦12,500 respectively should be made to Alpha, Beta, Cepha, and Delphi respectively. In addition, nine of the ten portions of the remainder of the Computed Income should be shared equally among the four children.

Chief Zeta has requested you to supervise the administration of the above Trust.

You are requested to:

a. State the basis of assessment of Estates, Trusts or Settlements. (1 Mark)

b. Identify the persons chargeable to Income Tax under the Trust or Settlement created by Chief Zeta. (3 Marks)

c. Compute the income of the Trust. (3 Marks)

d. Determine the amount due to each beneficiary. (6 Marks)

e. Explain how the Computed Income should be apportioned and how the Income Tax burden will be shared by all the parties. (Ignore Withholding tax). (2 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 20 Marks

TAX – May 2024 – L2 – SA – Q3 – Taxation of Non-Residents

Discuss significant economic presence in digital transactions and calculate the taxable income for Alhaji Yanko Abdulahi’s trust.

a. Section 6 (6A) of the Personal Income Tax Act Cap P8 LFN 2004, as amended by the Finance Act 2020, states that the Minister by Order can determine what constitutes the significant economic presence of a non-resident, executor, or trustee.

Required:
i. In relation to what constitutes a significant economic presence, discuss Digital transactions (4 Marks)
ii. Discuss Services (4 Marks)

b. Alhaji Yanko Abdulahi was a successful businessman in Kano before he died. He is survived by two children, Yahaya and Binta.

A trust was created for the benefit of his two children. The trustee’s records for the year ended December 31, 2021, revealed the following information:

Item Amount (N)
Rental income (gross) 2,400,000
Profit from trading activities 32,160,800
Interest received (gross) 840,000
Other income 630,500

Additional Information:

  • Yahaya is entitled to a fixed annuity of N148,000 per annum.
  • Allowance for trustee expenses: N62,000.
  • Capital allowance agreed with the Revenue: N1,260,000.
  • Trustee remuneration per trust deed:
    • Fixed – N25,000 per annum
    • Variable – 2% of computed income
  • Provision made for payment of N150,000 as discretionary payments to each child.
  • 60% of distributable income is shared between Yahaya and Binta in the ratio 55:45, respectively.

Required:
Compute the income of the trust assessable to tax in the hands of the trustee. (12 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 15 Marks

TAX – Nov 2015 – L2 – Q7 – Taxation of Trusts and Estates

This question requires the computation of income tax payable by trustees and the amount due to beneficiaries from the settlement of Chief Sarki Oliver for the 2010 year of assessment.

Chief Sarki Oliver died peacefully in his sleep on 31 December 2009. He is survived by three children – Jimmy, Ngozi, and Charles. Two Trustees were appointed for the Settlement created in favor of the children to ensure that they were not badly affected by the demise of their father. Details presented by the two Trustees for the year ended 31 December 2010 are as follows:

Income N’000
Rental income (gross) 225,000
Trading income 250,000
Dividends (gross) 170,000
Interest on bank deposit 107,500
Sundry income 105,000
Total Income 857,500

Additional Information: (i) The Interest income is from Super Bank plc
(ii) Administrative and other expenses amounted to N32,000
(iii) Interest on debt repayment by the Settlement was N25,000
(iv) Fixed annuity to a beneficiary was N41,000 (Gross)
(v) Each beneficiary is entitled to 1/5 share of the net distributable income
(vi) Under the terms of the Trust Deed, the Trustees made discretionary payments to:

  • Jimmy N30,000
  • Ngozi N26,000
  • Charles N15,000
    (vii) Capital allowances – N64,000
    (viii) Trustees’ remuneration: Fixed amount of N25,000 each plus 2% of Computed Income
    (ix) The children have no other income.

In view of the recent agitation by the extended family members, you were contracted as
a consultant to compute the following:

Required:
a. Compute the income tax payable by the Trustees on the Trust income. (8 Marks)
b. Calculate the amount due to each beneficiary of the Settlement. (7 Marks)

 

 

 

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 20 Marks

TAX – Nov 2020 – L1 – SA – Q3 – Taxation of Trusts and Estates

State the tax authorities of a trust or settlement and special provisions for unmarried children.

A settlement is a means by which enjoyment of an estate or part of it is transferred to another person, either through a disposition, trust or covenant, agreement, arrangement, or transition of assets by reference to a trust for the benefits of persons specified.

The term “trust” relates to an equitable obligation, binding a person, called the trustee, to deal with a property over which he/she has custody (which is called the trust property), for the benefit of persons (beneficiaries) of which he/she may be one.

Required:
a. State the relevant tax authorities of a trust or settlement and the beneficiaries.
(8 Marks)

b. State the special provisions in respect of settlement on unmarried children.
(12 Marks)

Total: 20 Marks

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 20 Marks

TAX – May 2021 – L1 – SB – Q1 – Taxation of Trusts and Estates

Calculation of net distributable income of a trust and assessable income of beneficiaries.

Chief Adio Jaiyesimi, a Chartered Accountant, died in London after a brief illness on June 10, 2015. He was survived by four children namely: Akeem; Ayodeji; Olabisi; and Adekunle. He created a trust for the benefits of his four children. The records of the trustee for the year ended December 31, 2020, have revealed the following:

Description Amount (N)
Adjusted trading profits for the year ended December 31, 2020 36,400,000
Dividend (gross) 305,000
Rental income (gross) 820,000
Interest received (gross) 118,500
Sundry income 24,800

Additional information:
(i) Fixed annuity paid to Deji, his first child: 81,000
(ii) Fixed remuneration for the trustee: 500,000
(iii) Variable remuneration of the trustee – 5% of gross income: 56
(iv) Allowable expenses of the trustee as agreed: 60,000
(v) Capital allowances as agreed with the Revenue: 395,000
(vi) Discretionary payments were made by the trustee in agreement with the trust deed as follows:

Beneficiary Amount (N)
Akeem 300,000
Ayodeji 250,000
Olabisi 220,000
Adekunle 180,000

(vii) One third of the distributable income is to be shared equally among the children.

Required:
a. Compute the net distributable income in the hands of the trustee. (13 Marks)
b. Compute the assessable income in the hands of each beneficiary. (7 Marks)

 

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 10 Marks

TAX – May 2018 – L2 – Q6b – Taxation of Trusts and Estates

Compute the amounts due to beneficiaries from Mr. Salami's estate.

Compute the amount due to the beneficiaries for 2016 Year of Assessment.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 1 Marks

BL – Nov 2014 – L1 – SA – Q20 – Law of Trusts

Identify who manages a Trust.

A Trust is managed by the
A. Beneficiaries
B. Trustee
C. Person that created it
D. Court
E. Bailiff

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 7 Marks

BL – May 2021 – L1 – SB – Q6b – Law of Trusts

Explain the law on creating a trust and state the essentials of a trust for Esero's proposed trust.

Esero, who lives in Maiduguri with his family, has three children in a high school. He intends to create a trust on his housing estate towards financing the education of his children up to postgraduate level. He has come to you for advice.

Required:
i. Explain the law on the mode of creating the trust. (4 Marks)
ii. State the THREE essentials of the proposed trust. (3 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 6 Marks

BL – MAY 2016 – L1 – SB – Q3b – Law of Trusts

This question explains the concept of trust and highlights its various uses.

Trust is created for the benefit of some other persons.

Required:
i. Explain the term “Trust.” (3 Marks)

ii. State THREE uses of Trust. (3 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 20 Marks

AT – Nov 2023 – L3 – Q4 – Ethical principles in taxation

Compute the chargeable income and tax payable for Fenty Trust Ltd and outline the general tax rules on trusts and beneficiaries.

Fenty Trust Ltd is a non-resident company acting as the trustee for four resident Ghanaians, each holding a 22.5% share in the Trust. The Trust was set up on the instruction of Mr. Karl Odogo before he died. Mr. Karl Odogo was a businessman with interests in real estate, transportation, and numerous natural resources.

The Board of Trustees decided to continue in the above businesses and others. As part of the Trust Deed, the Board of Trustees was to make donations for good causes and discretionary payments to the beneficiaries where appropriate.

In the year 2022, the following transactions took place:

  • Total rental income from the real estate was GH¢9,375,000.
  • Administrative expenses of the Trust for the year 2022 amounted to GH¢725,000.
  • A friend of Karl Odogo contributed GH¢600,000 to the Trust by way of donation.
  • Interest received on the bank account of the Trust was GH¢350,000 gross.
  • The Trust received a total amount of GH¢1,240,000 from the transport operations.
  • Total depreciation computed and treated using generally accepted accounting principles was GH¢104,000.
  • Remuneration and fees of the Trustees for the 2022 year of assessment were GH¢980,000.
  • The External Auditors of the Trust charged GH¢45,000 for the year 2022, and it has been paid.
  • Donations were made to the following persons and institutions:
    • Ghana Heart Foundation (receipt obtained from Ghana Health Service): GH¢15,000
    • Kumasi Children’s Home (receipt from Social Welfare Department): GH¢15,000
    • XYZ Political Party (receipt from the Political Party): GH¢45,000
    • Funeral of a cousin of one of the members of the Governing Board of the Trustees: GH¢5,000
  • The Ghana Revenue Authority has granted a capital allowance of GH¢81,250.
  • Discretionary payments of GH¢265,000 for each beneficiary were made during the year.

Required:
a) Compute the chargeable income and tax payable by the Trust for the 2022 year of assessment. (12 marks)
b) Outline the general tax rules on trust institutions and trust beneficiaries. (8 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 15 Marks

TAX – May 2015 – L2 – SC – Q7 – Taxation of Trusts and Estates

Determine computed income of a trust, tax liabilities, and apportionment of income among beneficiaries.

Chief Zeta created a Trust many years ago for the benefit of his four children, Alpha, Beta, Cepha, and Delphi. A lawyer was appointed as the Trustee to his Estate.

For the year ended 30 September 2014, the Trust income amounted to ₦3,120,000. Each of the beneficiaries receives an annuity of ₦150,000 every year while the expenses incurred on the administration of the Trust was ₦57,500 per annum. The trustee is on a remuneration of 2% of the Computed Income.

Chief Zeta instructed that discretionary payments of ₦22,500, ₦17,500, ₦15,000, and ₦12,500 respectively should be made to Alpha, Beta, Cepha, and Delphi respectively. In addition, nine of the ten portions of the remainder of the Computed Income should be shared equally among the four children.

Chief Zeta has requested you to supervise the administration of the above Trust.

You are requested to:

a. State the basis of assessment of Estates, Trusts or Settlements. (1 Mark)

b. Identify the persons chargeable to Income Tax under the Trust or Settlement created by Chief Zeta. (3 Marks)

c. Compute the income of the Trust. (3 Marks)

d. Determine the amount due to each beneficiary. (6 Marks)

e. Explain how the Computed Income should be apportioned and how the Income Tax burden will be shared by all the parties. (Ignore Withholding tax). (2 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 20 Marks

TAX – May 2024 – L2 – SA – Q3 – Taxation of Non-Residents

Discuss significant economic presence in digital transactions and calculate the taxable income for Alhaji Yanko Abdulahi’s trust.

a. Section 6 (6A) of the Personal Income Tax Act Cap P8 LFN 2004, as amended by the Finance Act 2020, states that the Minister by Order can determine what constitutes the significant economic presence of a non-resident, executor, or trustee.

Required:
i. In relation to what constitutes a significant economic presence, discuss Digital transactions (4 Marks)
ii. Discuss Services (4 Marks)

b. Alhaji Yanko Abdulahi was a successful businessman in Kano before he died. He is survived by two children, Yahaya and Binta.

A trust was created for the benefit of his two children. The trustee’s records for the year ended December 31, 2021, revealed the following information:

Item Amount (N)
Rental income (gross) 2,400,000
Profit from trading activities 32,160,800
Interest received (gross) 840,000
Other income 630,500

Additional Information:

  • Yahaya is entitled to a fixed annuity of N148,000 per annum.
  • Allowance for trustee expenses: N62,000.
  • Capital allowance agreed with the Revenue: N1,260,000.
  • Trustee remuneration per trust deed:
    • Fixed – N25,000 per annum
    • Variable – 2% of computed income
  • Provision made for payment of N150,000 as discretionary payments to each child.
  • 60% of distributable income is shared between Yahaya and Binta in the ratio 55:45, respectively.

Required:
Compute the income of the trust assessable to tax in the hands of the trustee. (12 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 15 Marks

TAX – Nov 2015 – L2 – Q7 – Taxation of Trusts and Estates

This question requires the computation of income tax payable by trustees and the amount due to beneficiaries from the settlement of Chief Sarki Oliver for the 2010 year of assessment.

Chief Sarki Oliver died peacefully in his sleep on 31 December 2009. He is survived by three children – Jimmy, Ngozi, and Charles. Two Trustees were appointed for the Settlement created in favor of the children to ensure that they were not badly affected by the demise of their father. Details presented by the two Trustees for the year ended 31 December 2010 are as follows:

Income N’000
Rental income (gross) 225,000
Trading income 250,000
Dividends (gross) 170,000
Interest on bank deposit 107,500
Sundry income 105,000
Total Income 857,500

Additional Information: (i) The Interest income is from Super Bank plc
(ii) Administrative and other expenses amounted to N32,000
(iii) Interest on debt repayment by the Settlement was N25,000
(iv) Fixed annuity to a beneficiary was N41,000 (Gross)
(v) Each beneficiary is entitled to 1/5 share of the net distributable income
(vi) Under the terms of the Trust Deed, the Trustees made discretionary payments to:

  • Jimmy N30,000
  • Ngozi N26,000
  • Charles N15,000
    (vii) Capital allowances – N64,000
    (viii) Trustees’ remuneration: Fixed amount of N25,000 each plus 2% of Computed Income
    (ix) The children have no other income.

In view of the recent agitation by the extended family members, you were contracted as
a consultant to compute the following:

Required:
a. Compute the income tax payable by the Trustees on the Trust income. (8 Marks)
b. Calculate the amount due to each beneficiary of the Settlement. (7 Marks)

 

 

 

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 20 Marks

TAX – Nov 2020 – L1 – SA – Q3 – Taxation of Trusts and Estates

State the tax authorities of a trust or settlement and special provisions for unmarried children.

A settlement is a means by which enjoyment of an estate or part of it is transferred to another person, either through a disposition, trust or covenant, agreement, arrangement, or transition of assets by reference to a trust for the benefits of persons specified.

The term “trust” relates to an equitable obligation, binding a person, called the trustee, to deal with a property over which he/she has custody (which is called the trust property), for the benefit of persons (beneficiaries) of which he/she may be one.

Required:
a. State the relevant tax authorities of a trust or settlement and the beneficiaries.
(8 Marks)

b. State the special provisions in respect of settlement on unmarried children.
(12 Marks)

Total: 20 Marks

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 20 Marks

TAX – May 2021 – L1 – SB – Q1 – Taxation of Trusts and Estates

Calculation of net distributable income of a trust and assessable income of beneficiaries.

Chief Adio Jaiyesimi, a Chartered Accountant, died in London after a brief illness on June 10, 2015. He was survived by four children namely: Akeem; Ayodeji; Olabisi; and Adekunle. He created a trust for the benefits of his four children. The records of the trustee for the year ended December 31, 2020, have revealed the following:

Description Amount (N)
Adjusted trading profits for the year ended December 31, 2020 36,400,000
Dividend (gross) 305,000
Rental income (gross) 820,000
Interest received (gross) 118,500
Sundry income 24,800

Additional information:
(i) Fixed annuity paid to Deji, his first child: 81,000
(ii) Fixed remuneration for the trustee: 500,000
(iii) Variable remuneration of the trustee – 5% of gross income: 56
(iv) Allowable expenses of the trustee as agreed: 60,000
(v) Capital allowances as agreed with the Revenue: 395,000
(vi) Discretionary payments were made by the trustee in agreement with the trust deed as follows:

Beneficiary Amount (N)
Akeem 300,000
Ayodeji 250,000
Olabisi 220,000
Adekunle 180,000

(vii) One third of the distributable income is to be shared equally among the children.

Required:
a. Compute the net distributable income in the hands of the trustee. (13 Marks)
b. Compute the assessable income in the hands of each beneficiary. (7 Marks)

 

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 10 Marks

TAX – May 2018 – L2 – Q6b – Taxation of Trusts and Estates

Compute the amounts due to beneficiaries from Mr. Salami's estate.

Compute the amount due to the beneficiaries for 2016 Year of Assessment.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 7 Marks

BL – May 2021 – L1 – SB – Q6b – Law of Trusts

Explain the law on creating a trust and state the essentials of a trust for Esero's proposed trust.

Esero, who lives in Maiduguri with his family, has three children in a high school. He intends to create a trust on his housing estate towards financing the education of his children up to postgraduate level. He has come to you for advice.

Required:
i. Explain the law on the mode of creating the trust. (4 Marks)
ii. State the THREE essentials of the proposed trust. (3 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 6 Marks

BL – MAY 2016 – L1 – SB – Q3b – Law of Trusts

This question explains the concept of trust and highlights its various uses.

Trust is created for the benefit of some other persons.

Required:
i. Explain the term “Trust.” (3 Marks)

ii. State THREE uses of Trust. (3 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 20 Marks

AT – Nov 2023 – L3 – Q4 – Ethical principles in taxation

Compute the chargeable income and tax payable for Fenty Trust Ltd and outline the general tax rules on trusts and beneficiaries.

Fenty Trust Ltd is a non-resident company acting as the trustee for four resident Ghanaians, each holding a 22.5% share in the Trust. The Trust was set up on the instruction of Mr. Karl Odogo before he died. Mr. Karl Odogo was a businessman with interests in real estate, transportation, and numerous natural resources.

The Board of Trustees decided to continue in the above businesses and others. As part of the Trust Deed, the Board of Trustees was to make donations for good causes and discretionary payments to the beneficiaries where appropriate.

In the year 2022, the following transactions took place:

  • Total rental income from the real estate was GH¢9,375,000.
  • Administrative expenses of the Trust for the year 2022 amounted to GH¢725,000.
  • A friend of Karl Odogo contributed GH¢600,000 to the Trust by way of donation.
  • Interest received on the bank account of the Trust was GH¢350,000 gross.
  • The Trust received a total amount of GH¢1,240,000 from the transport operations.
  • Total depreciation computed and treated using generally accepted accounting principles was GH¢104,000.
  • Remuneration and fees of the Trustees for the 2022 year of assessment were GH¢980,000.
  • The External Auditors of the Trust charged GH¢45,000 for the year 2022, and it has been paid.
  • Donations were made to the following persons and institutions:
    • Ghana Heart Foundation (receipt obtained from Ghana Health Service): GH¢15,000
    • Kumasi Children’s Home (receipt from Social Welfare Department): GH¢15,000
    • XYZ Political Party (receipt from the Political Party): GH¢45,000
    • Funeral of a cousin of one of the members of the Governing Board of the Trustees: GH¢5,000
  • The Ghana Revenue Authority has granted a capital allowance of GH¢81,250.
  • Discretionary payments of GH¢265,000 for each beneficiary were made during the year.

Required:
a) Compute the chargeable income and tax payable by the Trust for the 2022 year of assessment. (12 marks)
b) Outline the general tax rules on trust institutions and trust beneficiaries. (8 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
knowsia

Elevate your professional expertise across key business domains with our comprehensive training programs

Our offerings

Contact Info

  • +233203701923
    +233543919232
  • info@knowsia.com

Customer

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope