Gifting to a Private Trust or Company

A gift to a private trust or private company from a sole attributable stakeholder

If a sole attributable stakeholder, or members of a couple who are the only attributable stakeholders, make a capital injection into a structure in the form of a gift, that gift will not be subject to the disposal or deprivation provisions but must be included in the value of the structure. This is because a sole attributable stakeholder, or members of a couple who are the only attributable stakeholders, cannot gift to themselves.

Gifts to a private trust or private company from multiple attributable stakeholders

If there are multiple attributable stakeholders and one of those stakeholders makes a capital injection to a structure in the form of a gift, the gift will be included in the value of the structure and attributed to the attributable stakeholders in accordance with their assessed attribution percentage. The attributable stakeholder who made the gift will be subject to the deprivation provisions of the Act, in regard to the amount of the gift attributed to the other (attributable) stakeholders.    

Example of a gift to a private trust or company from a multiple attributable stakeholder

John and Jim are the attributable stakeholders of a private company, with an attribution percentage of 50% each. John gifts $30,000 to the company. Fifty percent ($15,000) of the gift is subject to the disposal rules which results in an amount of $5,000 held against John as a deprived asset for 5 years from the date of the gift.

A gift to a private trust or private company from a third party

If the gift is from a third party (that is, a person who is not an attributable stakeholder of the trust or company), the amount of the gift will be added to the value of the entity. The third party making the gift would be subject to the deprivation provisions, if that third party is or becomes an income support recipient.