{"id":6490,"date":"2014-06-26T09:06:00","date_gmt":"2014-06-26T09:06:00","guid":{"rendered":"http:\/\/localhost\/sccblog\/?p=6490"},"modified":"2014-06-26T09:53:34","modified_gmt":"2014-06-26T04:23:34","slug":"beneficiary-not-liable-to-tax-until-the-discretion-is-exercised-by-the-trustee-in-the-discretionary-trust","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2014\/06\/26\/beneficiary-not-liable-to-tax-until-the-discretion-is-exercised-by-the-trustee-in-the-discretionary-trust\/","title":{"rendered":"Beneficiary not liable to tax until the discretion is exercised by the trustee in the discretionary trust"},"content":{"rendered":"

Supreme Court: <\/span><\/b>In a case dealing with assessment of income\/wealth on an offshore discretionary trust, a division bench of R. M. Lodha and Shiva Kirti Singh, JJ., interpreted that a discretionary trust is one which gives a beneficiary no right to any part of the income of the trust property, but vests in the trustees a discretionary power to pay him, or apply for his benefit, such part of the income as they think fit. Explaining further, the Court said that the trustees must exercise their discretion as and when the income becomes available, but if they fail to distribute in due time, the power is not extinguished so that they can distribute later and that they have no power to bind themselves for the future.  Having explained the concept of discretionary trust, the Court held that the value of the assets cannot be assessed on the estate of the beneficiary until the discretion has been exercised by the trustee. Commissioner of Wealth Tax v. Estate of late HMM Vikramsinhji of Gondal, Civil Appeal no. 2312 of 2007, <\/i>decided on 16 April, 2014<\/o:p><\/span><\/p>\n

To read the full judgment, click here<\/a><\/i><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Supreme Court: In a case dealing with assessment of income\/wealth on an offshore discretionary trust, a division bench of R. M. Lodha <\/p>\n","protected":false},"author":3,"featured_media":7321,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9],"tags":[3125],"class_list":["post-6490","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-supremecourt","tag-Trusts__Trustees"],"yoast_head":"\nBeneficiary not liable to tax until the discretion is exercised by the trustee in the discretionary trust | SCC Times<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.scconline.com\/blog\/post\/2014\/06\/26\/beneficiary-not-liable-to-tax-until-the-discretion-is-exercised-by-the-trustee-in-the-discretionary-trust\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Beneficiary not liable to tax until the discretion is exercised by the trustee in the discretionary trust\" \/>\n<meta property=\"og:description\" content=\"Supreme Court: In a case dealing with assessment of income\/wealth on an offshore discretionary trust, a division bench of R. 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