AUSTRALIAN TRUSTS WITH FOREIGN BENEFICIARIES
This paper begins with a general overview of the Australian income tax treatment of a resident trust with non-resident beneficiaries (section 2).
It then proceeds to tease out some strands of the fiscal fabric covering two rather different scenarios:
(a) where the foreign beneficiary is or becomes entitled to Australian dividend, interest or royalty income in the year of its derivation by the trust (sections 2.3 and 3) and
(b) where foreign-sourced income that has been taxed to the trust is subsequently distributed to the foreign beneficiary with a refund of Australian tax (section 4).