TaxLawGHby MSL Business School
MSL Business SchoolTrustees, beneficiaries and deceased estates
Ghana Trust and Estate Tax
A structured guide to separate trust taxation, beneficiary distributions, trust residence and the tax duties of executors and estate administrators.
Published by MSL Business School.
MSL Business School — Trustees, beneficiaries and deceased estates at a glance
Controlling answer
The trust and the beneficiary are separate tax subjects.
Section 56 makes a trust liable to tax separately from its beneficiaries. A distribution from a resident trust is exempt in the beneficiary's hands, while a distribution from a non-resident trust is included in the beneficiary's income. A gain on disposal of a beneficiary's trust interest is also included in that beneficiary's income.
Trustees, beneficiaries and deceased estates
Calculate each trust as its own taxpayer
The trust is liable separately from its beneficiaries.
Where the same people are trustees for more than one trust, each trust's income is calculated separately.
The trust is generally treated as an entity when its tax liability is calculated.
A trust of an incapacitated individual is instead treated as though it were an individual.
Assets owned and liabilities owed by the trust or trustee are treated as those of the trust, unless the trustee acts merely as agent.
Subject to Act 896, arrangements between the trust, trustees and beneficiaries are recognised.
Trustees, beneficiaries and deceased estates
Apply the distribution rule by trust residence
| Beneficiary event | Income-tax result |
|---|---|
| Distribution from a resident trust | Exempt in the beneficiary's hands. |
| Distribution from a non-resident trust | Included in calculating the beneficiary's income. |
| Disposal of a beneficiary's trust interest | The gain is included in the beneficiary's income. |
Do not replace the statutory residence test with the location of a bank account, beneficiary or asset. Establish the trust's residence for the relevant year before classifying a distribution.
Trustees, beneficiaries and deceased estates
A trust has three alternative Ghana residence tests
A trust is resident for a year if any one of these tests is met:
- 01The trust is established in Ghana.
- 02A trustee is resident in Ghana at any time during the year.
- 03A Ghana-resident person directs or may direct senior managerial decisions of the trust, alone or jointly and directly or through interposed entities.
Evidence file: retain the trust deed, variations, trustee-residence evidence, protector and appointor powers, investment-management arrangements, minutes and decision records.
Trustees, beneficiaries and deceased estates
An executor must close the deceased person's tax position before distributing the estate
The death of an individual does not erase outstanding returns or tax. Act 915 requires the executor or legal representative to submit returns on behalf of the deceased for matters occurring before the appointment. The receiver rules also require notice, provision for tax and priority for unpaid tax before relevant assets are distributed.
Identify unfiled returns, assessments, withholding credits, instalments and tax debts of the deceased.
Classify post-death income and gains according to the legal arrangement under which the executor or administrator holds and realises the assets.
Separate a distribution of estate capital from income, gains, consideration for an asset and any trust distribution.
No general inheritance-tax shortcut: this page addresses income-tax and administration duties. Property transfers may also require stamp-duty, realisation and registration analysis.
Trustees, beneficiaries and deceased estates
Build the trust or estate compliance file around the governing instrument
- 01Register the trust or estate administration
Use the appropriate organisational TIN and tax-type registrations.
- 02Confirm residence and year end
A trust uses its accounting year, subject to any approved change.
- 03Separate capital and income
Reconcile receipts, expenses, asset realisations, liabilities and distributions.
- 04Operate withholding and payroll
A registered trust making covered payments may be a withholding agent and employer.
- 05File the annual return
File within four months after the trust's year of assessment and settle any balance due.
- 06Reconcile beneficiaries
Keep distribution statements identifying the trust, residence, date, amount and legal character.
Frequently asked questions
Ghana Trust and Estate Tax questions
Is a trust taxed separately from its beneficiaries in Ghana?
Yes. Section 56 of Act 896 makes a trust separately liable.
Is a distribution from a resident Ghana trust taxable to the beneficiary?
No. Section 57 exempts the distribution in the beneficiary's hands.
What happens to a distribution from a non-resident trust?
It is included in calculating the beneficiary's income.
When is a trust resident in Ghana?
If it is established in Ghana, has a Ghana-resident trustee during the year, or a Ghana-resident person directs or may direct its senior managerial decisions.
Must an executor deal with the deceased person's tax returns?
Yes. Act 915 places return and tax-protection duties on executors and other receivers.
MSL Business School legal reference map
Primary authority and official sources
- Income Tax Act, 2015 (Act 896)Open official source →
- Revenue Administration Act, 2016 (Act 915)Open official source →
- GRA residence guidanceOpen official source →
- GRA organisational TIN guidanceOpen official source →
Institutional publisher
TaxLawGH is MSL Business School's Ghana tax education platform.
MSL Business School publishes TaxLawGH to make Ghana's tax law easier to find, understand and apply.
Explore MSL Business School →