Charitable trust loans to trustee

Summary: Providing a loan from a charitable trust to its trustee is generally prohibited as it violates the condition that trust funds must be used exclusively for charitable purposes. Doing so, particularly if interest-free, risks the loss of the trust's tax-exempt status under Section 13 of the Income Tax Act and may constitute a breach of the trustee's fiduciary duty. Always consult a legal professional before considering such transactions.