Income Moving Through Intermediaries
7.28. The determination of net income as explained in this chapter is the primary step in ascertaining the amount of income on which tax is levied, whether the income is that of an individual, a trust estate, a partnership or a company.
7.29. A trust estate has income and may be a taxable entity distinct from its beneficiary. Where there is a beneficiary presently entitled to the income, the income is taxed to the beneficiary; though where the beneficiary is a child, the tax may in effect be paid for him by the trustee. Where, however, there is no beneficiary presently entitled, the income is taxed to the trustee as if it were the income of an individual or, in some circumstances, at a special rate of 50 per cent.
7.30. A partnership has income but the income is treated as income of its members in accordance with their interests in the partnership. A partnership is not a taxable entity distinct from its members.
7.31. The taxation of trusts and partnerships is considered in Chapter 15.
7.32. The income of a company is taxed to the company and is taxed again to shareholders when distributed to them. This system is examined in Chapter 16.