You need to take action before June 30
As the controller of a Discretionary Trust we need to bring some specific issues to your attention as a result of a change in approach by the Australian Tax Office (ATO) to Trust Distributions.
This change in approach requires you to have a much better understanding of:
- The taxable income position of your Trust at year end
- The beneficiaries you are likely to distribute to
- The terms of your Trust Deed in relation to the definition of Trust Income, whether or not the Deed allows you to “stream” certain types of income, whether you have a default beneficiary clause etc.
A failure to understand your Deed and / or make distribution resolutions will most likely result in more tax being paid on Trust Income. So whilst we will continue to assist you with these important decisions we now need to do so prior to 30 June each year to ensure the optimal tax outcome.
We have outlined your options in our Trust Distributions page on our website. These changes are extremely important and will have a tax impact if they are not acted upon. There are also other details surrounding Trust Distribution that are important for you to know about.