Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) A payment of a * personal injury annuity or a * personal injury lump sum to the trustee of a trust is exempt from income tax for the trustee if:
(a) the beneficiary of the trust is the * injured person; and
(b) because of Subdivision 54 - B or 54 - C, the payment would have been exempt from income tax if it had been made directly to the beneficiary.
(2) A payment made in accordance with paragraph 54 - 35(3)(b) to the trustee of a trust is exempt from income tax for the trustee if:
(a) the beneficiary of the trust is the reversionary beneficiary; and
(b) because of section 54 - 65, the payment would have been exempt from income tax if it had been made directly to the beneficiary.
(3) A payment of a lump sum in accordance with subsection 54 - 35(4) to the trustee of a trust is exempt from income tax for the trustee.
(4) If a payment is exempt from income tax for a trustee because of this section, the payment is also exempt from income tax for a beneficiary, or the beneficiary, of the trust, even if the trustee:
(a) pays all or part of the payment to the beneficiary; or
(b) applies all or part of the payment for the benefit of the beneficiary.