Section LF 3 — Income Tax Act 2007: Beneficiaries of trusts

LF 3 Beneficiaries of trusts When this section applies (1) This section applies when a person who has a tax credit under section LF 1 is the beneficiary of a trust and, in that capacity, derives a dividend with an FDP credit attached. Limitation on amount of credit (2) The person’s tax credit is limited to an amount calculated using the formula— person's distributions × total beneficiary credits − person's supplementary dividend. trust distributions Definition of items in formula (3) In the formula,— (a) person’s distributions is the total distributions for the tax year made to the person in their capacity as beneficiary of the trust: (b) trust distributions is the total distributions for the tax year made to all beneficiaries of the trust in their capacity as beneficiaries, and includes all supplementary dividends paid to them: (c) total beneficiary credits is the total FDP credits attached to dividends and total supplementary dividends for the tax year paid to all beneficiaries of the trust in their capacity as beneficiaries: (d) person’s supplementary dividend is the total supplementary dividends for the tax year paid to the person in their capacity as beneficiary of the trust. Defined in this Act: amount , distribution , dividend , FDP credit , supplementary dividend , tax credit , tax year , Compare: 2004 No 35 s LB 1(1)(a), (2), (3), (3A)