The problem, with regard to the medical expenses, is to prove that it was ‘paid by the person’. “Although a special trust is taxable at the rates of normal tax applicable to a natural person, it is not a natural person and accordingly does not qualify for any rebate or exemption that applies only to natural persons, for example, the primary, secondary and tertiary rebates under section 6, the medical tax credits under sections 6A and 6B, or the interest exemption under section 10(1)(i).”įor the beneficiary, to the extent that the amounts so vested constitute ‘income’, the amounts will be included in his or her gross income. SARS confirms this in their guide – paragraph 5.8 when they say that: The beneficiary will then be entitled to the section 6B rebate. The principle is that the trustees, in paying these expenses actually vested an amount in the beneficiary (or distributed an amount that vested in the beneficiary). The trust, special trust or otherwise, cannot make a deduction of the medical expenditure incurred on behalf of a beneficiary of the trust. If not, we agree with you that the payment of the medical expenses, from the income that accrued to the beneficiaries, would constitute a vesting event. We accept that the beneficiary, the person with a disability as defined in section 6B(1), has a vested right to the income of the trust. What will the tax implications be in the trust's name & in the beneficiary's name? The trust receives interest income from investments made in the trust's name, and pays yearly medical expenses on behalf of the beneficiary with the disability. This article is based on tax law for the tax year ending 28 February 2021.Ī Special Trust is created for a person who has a disability. The tax implications of medical expenses paid by a special trust on behalf of a beneficiary with a disability (1)Tax Administration Part 3B Dispute Resolution - Objection and appeal.(2)Tax Administration Part 2B: Resolving Problems with SARS using the Tax Ombud.(1)Salaried Employees - Specific Transactions.(1)Retirement Lump Sum Retirement Benefits.(2)Provisional tax (Link with other Taxes).(1)Nature of the rights of beneficiaries.(1)Liquidations, winding-up and deregistration.(1)Income Tax Consequenses of Donations.(2)Employer and Employee (PAYE and UIF Specific).(2)Dividends Tax, STT & Return of Capital: Taxation of dividends.
(2)Dividends Tax, STT & Return of Capital: Securities transfer tax You may be allowed a deduction of payments for (i) a prepaid funeral insurance policy that covers you or (ii) medical or dental insurance premiums for any.(1)Deferred tax assets and deferred tax on equity.(1)Deductions Pre-trade and prepaid expenses.
#ARE MEDICAL EXPENSES TAX DEDUCTIBLE FOR A TRUST FULL#
(1)Debt restructuring and corporate reorganisations full series.(1)Capital Gains Tax Implications of Trusts.
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