We have a trust which owns several properties. The trust has two funds, each with a separate life tenant. Some of the properties are owned by one fund and some by the other.
In 2016/17, one fund has generated a gain, the other a loss. For SA purposes, this is one trust and so the two have been netted off for the purposes of computing the trustees’ Income Tax liability.
Question is, what do we show on the R185s? Do we show the whole of the profit making fund’s income on the beneficiary’s R185 with a white space disclosure that the other fund made a loss? This seems wrong because the R185 will then show a tax credit larger than the tax that has been paid. Or do we show the overall net taxable income on the R185 of the beneficiary of the fund that is in profit? It will match to the net income on the tax return, but actually, the beneficiary is entitled to more than that, so it doesn’t seem right either?!