ABSTRACT
When a trust is validly created, there are three parties who become potentially liable to pay the tax: namely, the settlor, trustees and beneficiaries. The liability of each is mutually exclusive, that is, when the settlor of a trust becomes liable to income tax, the trust itself (trustees and beneficiaries) is exempt from liability to income tax and, similarly, when the trustees become liable to income tax, the beneficiaries and the settlor are not liable.
