Discretionary Trusts

Discretionary Trusts

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Important information about your trust

A critical responsibility for a trustee of a Discretionary Trust (eg. your Family Trust) is to pass a formal resolution to distribute the income or profit of the Trust by 30 June each year. This is done through a Trust Distribution Resolution.

NOTE: If a trustee fails to make a resolution to distribute Trust income or profits by the end of the financial year, the trustee may be assessed on the Trust income at the highest marginal tax rate, rather than intended beneficiaries being taxed individually.

Before signing a Trust Distribution Resolution, it is important to review the affairs of the Trust for the financial year and inform us if there have been any significant events that have taken place during the financial year that we may not be aware of, so that the Distribution Minute can be updated.

Significant Events

Significant Events

Below is a list of significant events or changes you need to consider before signing a Trust Distribution Resolution:

  1. Has your Trust previously distributed income to a minor who has turned 18 years of age during the past 12 months or who will turn 18 before 30 June?
  2. Does your Trust receive franked income, either from company dividends or from managed funds?
  3. Did your Trust dispose of a capital asset during the financial year, including any land or buildings, shares in companies or units in managed funds?
  4. Has there been a significant change in any of the Trust’s investments during the financial year?
  5. If the Trust is trading in business, has there been any significant change in the trading conditions or expected business profits?
  6. Are there any new beneficiaries that, as trustee, you would like to distribute income to that you have previously not distributed to?
  7. Please provide a record of any major costs paid on behalf of your adult beneficiaries (cars, HELP debt, house deposits etc.), no matter where it was paid from and when.

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