Q: If property held in a trust is rented out by the trustees for short-stay accommodation, who should declare the income, and what deductions can be claimed?
A: The income belongs to the trustees and will generally have to be declared in the trust’s tax return. However, some or all of the income may be allocated as beneficiary income, which means it would be taxed at the beneficiary’s tax rate rather than at the trust rate. Expenses relating to the income (rates, insurance, repairs etc.) can be deducted but only partly if the expenditure also relates to private use or non-income-earning use of the property.

Q: If property held in a trust is rented out by a beneficiary of the trust for short-stay accommodation, who should declare the income, and what deductions can be claimed?
A: The income belongs to the beneficiary because they’re the one granting the licence to the guests to stay. Non-capital costs related to earning the income can be deducted, but some of these costs will only be partly deductible if they also relate to private use of the property.