Question 3
ICAN
•
2024
•
TAXATION
•
mixed
Case Stimulus
Section 6 (6A) of Personal Income Tax Act Cap P8 LFN 2004 as amended by Finance Act 2020, states that the Minister by Order can determine what constitutes the significant economic presence of a non-resident, executor or trustee. Alhaji Yanko Abdulahi was a successful businessman in Kano before he died. He is survived by two children, namely: Yahaya and Binta. A trust was created for the benefit of his two children. The records of the trustee for the year ended December 31, 2021, revealed the following information: Rental income (gross) 2,400,000 Profit from trading activities 32,160,800 Interest received (gross) 840,000 Other income 630,500
Additional Information
{
"label": "(i)",
"content": "Yahaya is entitled to a fixed annuity of N148,000 per annum."
}
{
"label": "(ii)",
"content": "Allowance for expenses of the trustee amounted to N62,000."
}
{
"label": "(iii)",
"content": "Capital allowance agreed with the Revenue amounted to N1,260,000."
}
{
"label": "(iv)",
"content": "Trustee remuneration per trust deed: Fixed – N25,000 per annum Variable – 2% of computed income."
}
{
"label": "(v)",
"content": "The trust has made provision for the payment of N150,000 as discretionary payments to each of the children."
}
{
"label": "(vi)",
"content": "60% of the distributable income is to be shared between Yahaya and Binta in the ratio 55:45, respectively."
}
Requirements
(
a
)
Compute the income of the trust assessable to tax in the hands of the trustee.
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About This Question
This is
Ican
2024
Taxation
Question 3.
It is one of the
mixed
questions from the
2024
Ican
Taxation
examination.