Statement number

Statement

(1)

A trust has its own tax file number (TFN) and must lodge an annual tax return showing all income and deductions of the trust estate, plus any distributions to its beneficiaries.

(2)

Trusts do not pay income tax, rather the trust income will be taxed either in the hands of the beneficiaries or the trustee (or a combination of both).

(3)

As a trust is not a separate legal entity it is ineligible to register for GST or obtain an Australian Business Number (ABN).

(4)

An advantage of using a trust as a business structure is that a trust has perpetual existence and can continue indefinitely.

(5)

An advantage of using a trust as a business structure is that revenue losses flow through to the beneficiaries.

Which of the above statements are TRUE?

[A] Only statements numbered (1) and (2) are true.

[B] Only statements numbered (1) and (4) are true.

[C] Only statements numbered (1), (3) and (4) are true.

[D] Only statements numbered (1), (3) and (5) are true.

[E] Only statements numbered (1), (2), (4) and (5) are true.