A beneficiary is a person for whom a trust is created & who receives the benefit of that trust.
With regard to most discretionary trust deeds “specified beneficiaries” are listed on the schedule and are most commonly immediate family members, & included in the deed is a clause relating to “general beneficiaries” such as parents, grandparents, aunties, uncles, sisters, brothers, nieces & nephews of the “specified beneficiaries”.
Also permissible in the deed as beneficiaries are companies, charities & trustees of family trust. The trustee of the trust to be created may also be a beneficiary, but not the sole beneficiary unless there is more than one natural person trustee.
Beneficiaries may have an entitlement to trust income or capital that is set out in the trust deed or they may acquire an entitlement because the trustee exercises discretion to pay them income or capital.
Generally, the beneficiaries are taxed on the net income of a trust based on their share of the trust income – regardless of when or whether the income is actually paid to them.