Taxation of charitable trusts
Charitable
trusts have their incomes exempted from tax.
The conditions
for exemption are:
-
It must be public in
character for a small section of the public or for the general public.
-
It is for relief of
distress of poverty to the public or if the beneficiary is not liable to tax.
-
It is for the
advancement of religion or education.
-
Its income must be
wholly or mainly expended in Kenya
for charitable purposes.
-
Deceased person
income assessed on executors or administrators
-
Incapacitated persons
and minors – income assessed on guardian or trustee.
-
Married women –
income not earned at arms length assessed on the husband
-
Non-resident ship
owners – income assed on the captain of the ship
(ii) Payment
of tax by a married woman living with the husband.
-
Where the husband has
been declared bankrupt
-
Where the husband is
of unsound mind
-
Where the husband
does not have distrainable goods
-
Where the husband
does not have any taxable income (wife is the sole bread winner)
-
The husband is untraceable
or has gone underground.
Set-off
tax
- Tax
already paid by way of PAYE instalment tax systems, withholding tax (if not
final tax), refunds claimable from tax authorities, shall be deducted from tax
charged on the tax payer for the year of income in respect of which it was
deducted.
try this) Explain the circumstances under which a tax authority may conduct a PAYE audit on a business. (8 marks)
ReplyDeleteb) With reference to decided cases on tax, comment on the tax treatment of payments received or cancellation of a business contract. (4 marks)
c i) State key provision of section 19 of the income Tax Act (cap470) relate to the taxation of savings and credit cooperative societies.