Trust Distributions

Jun 20, 2023

Trust Income Resolutions

The Taxation Office has again been active with regard to income distributions from trusts.

A number of cases, together with ATO guidance across the year, have all concluded that unless the adult beneficiary outside of the spousal arrangement receives the economic benefit of the distribution then the trustee resolution may be ineffective.

The ATO’s success in these cases demonstrates the importance for trustees to ensure that they have considered the ATO’s guidelines on section 100A properly.

The interpretations suggest that the individual beneficiary must receive the distribution within two years.  Alternatively, where the funds are retained by the trust the beneficiary must have some form of control or be involved in the management of the underlying business.

Navigating the complexities of trust distributions and ensuring compliance with tax laws requires professional expertise. Our experienced team is well-versed in trust structures and taxation regulations. We can provide tailored advice to assist trustees and beneficiaries in making informed decisions regarding trust distributions.

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