Avoiding Extra Tax Using Trust Distribution Resolutions

16 April 2019

Avoid extra tax by making your Trust Distribution Resolutions before 30 June 2019

If you have a Discretionary Trust (also known as a Family Trust), this information could be beneficial to you.

In the lead-up to 30 June 2019, we want you to be aware that you need to complete your trust distribution resolutions before 30 June. Why? To avoid paying extra tax of up to 47% of Trust profits.

How can this happen?

If a Trustee of a Trust fails to make a resolution to distribute the income of the Trust before the end of the financial year, the Trustee may be assessed by the Australian Taxation Office (ATO) on the Trust income at the highest marginal tax rate of 47%, rather than the intended beneficiary(s) being taxed.

Even though preparing a trust distribution resolution before the end of the financial year can be quite complex, we need to help you to comply with the trust taxation laws. 

The steps we need to undertake on your behalf include:

• Review of your prior year Trust Distribution Resolution
• Confirmation with you of the estimated Trust income of your Trust for the year ended 30 June 2019
• Review of your Trust Deed to ensure that the income definition and distribution clauses in your Trust Deed allow the proposed Trust Distribution Resolution for 30 June 2019
• Advise on the most tax effective distribution of this estimated Trust income
• Preparation of Trust Distribution Resolution and ensuring it is signed by the Trustees PRIOR to 30 June 2019

Contact us today! The sooner we get started, the sooner we can help you save tax – well before 30 June for sufficient time to implement tax saving strategies.

Contact the team at Shakespeare on 9321 2111 to discuss how this may apply to your individual circumstances.

Source: Change GPS

General disclaimer: Our firm provides the information on this website for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles on this website are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose

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