The question was
1. The Trust which basically has one flat in it, BORROWS money on the strength of the flat. Say around £150K. Can the beneficiary pay off this loan using the rent money that has been passed to her from the Trust. (The reason being she pays tax at 22% not 45%)
2. If not then if the Trust raises the £150K loan and the rent money is used to pay off this loan, will it have to be kept IN the Trust and not passed to the beneficiary. In which case it will be taxed at 45% which renders the project rather pointless as there will be little money left to service the loan after tax. Therefore I want the beneficiary to service the loan raised by the Trust.
1) yes, this is possible if the lender agrees to the beneficiary repaying the loan on behalf of the Trust;2) see above.All the best
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