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Beneficiary loan accounts

Discussion in 'Accounting, Tax & Legal' started by Joseph, 24th Aug, 2008.

  1. Joseph

    Joseph New Member

    Joined:
    3rd Jun, 2008
    Posts:
    2
    Location:
    Sydney
    Hi,

    Please advise how beneficiary loan accounts work in a trust.

    How is a beneficiary loan a accounts receivable under assets and how a beneficiary loan can be as a unsecured loan under liabilities.

    Thanks.
     
  2. Rob G.

    Rob G. Well-Known Member

    Joined:
    6th Jun, 2007
    Posts:
    717
    Location:
    Melbourne, VIC
    Depends on whether the account is in debit or credit.

    Debit balance: Beneficiary owes money to trust (asset of trust).

    Credit balance: Trust owes beneficiary money (liability of trust).

    Also, how does your trust deed treat unpaid present entitlements. Even if they are not treated as loans by the deed, the ATO might deem them to be.

    Cheers,

    Rob