“Connected persons” are defined as a non-arm’s-length commercial relationships that act as the cornerstone for applications in anti-avoidance legislation. In the Income Tax Act, a connected person can be defined in relation to three facets, namely natural persons, trusts and connected persons in relation to a trust. Let’s unpack this:
- Natural persons
In the simplest of terms: Human beings are natural persons. As a result, this term refers to those with an established legal personality at birth. Relatives to a natural person can be the person’s spouse, anyone related in the third degree of consanguinity, anyone related to the person’s spouse in the third degree of consanguinity and the spouse of anyone related within this degree. This relation is ceased upon the termination of a marriage contract or due to death.
A trust is considered a connected person due to its relation to a natural person, though this depends on the natural person’s beneficiary status to the trust in question. A beneficiary in this circumstance refers to the person who has an interest in a portion of the accrual or assets of the trust.
- Connected persons in relation to a trust
A connected person in relation to a trust is also defined as a connected person in relation to a trust’s beneficiary. As a result, all connected persons in relation to a particular trust are related to one another. For example, a trust’s beneficiary and a company that holds equity shares are related to one another as they are connected people in relation to a trust.
At MMS Trust Services we pride ourselves in the offering of the following services:
- Acting as the Independent Accounting Officers for all types of local Trusts
- Accounting up to Trial Balance
- Preparation of Annual Financial Statements of Trusts
- Completion and Submission of all types of Tax Returns for Trusts and Individuals
- Process and procedure reviews
- Attending Trustee Meetings
- Specialised Taxation advice on local Trusts and related parties to a Trust
Should you require trust services, feel free to contact our team..
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