In the lead-up to 30 June 2021, if you have a Discretionary Trust (also known as a Family Trust), you need to complete your trust distribution resolutions before 30 June 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 beneficiaries being taxed at generally much lower tax rates.
What we can do to help you
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 2021
- 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 2021
- Advice 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 2021
Contact us today! The sooner we get started with preparing your 2021 Trust Distribution Resolutions, the sooner we can help you save tax – well before 30 June 2021 for sufficient time to implement tax saving strategies.
Please contact us to book your tax planning consultation on (03) 8419 9800.
This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from your financial adviser and seek tax advice from your accountants at Wilson Pateras Accountants & Advisors. Information is current at the date of issue and may change.