When do you need to have your trust distributions minutes prepared by??

It’s almost 30 June.  Have you done your trust distribution minutes?

If you have a discretionary trust, then 30 June is an important date for you.

This is because, before 30 June, a trustee must exercise its discretion to decide which beneficiaries to make ‘presently entitled’ to the trust’s income for that income year.

The trustee’s decisions are recorded in the distribution minutes for that income year, which need to be carefully prepared to deal with things like:

  • How ‘trust law income’ is to be defined for this income year;
  • Whether the trustee will exercise discretion to determine ‘trust law income’ on the same basis as taxable ‘net income’;
  • Whether the trustee will decide to ‘stream’ specific categories of income like capital gains and franked distributions; and
  • Whether a default beneficiary or ‘balance’ beneficiary will be nominated to deal with any amounts not effectively distributed (such as if the trust is audited in future).

If a trustee fails to exercise its discretion before 30 June, then usually the trustee itself will end up being taxed on the trust’s taxable income for that year, and at the top marginal rate!

The ATO used to allow trusts up to two months to prepare and execute their distribution minutes.  However, with the withdrawal of the ATO’s IT 328 and IT 329 guidance, 30 June is now a hard deadline.

If you need assistance to prepare your trust distribution minutes prior to 30 June, and to make sure those minutes deal with the issues above, call Andreyev Lawyers on 1300 654 590.  You can also download a copy of our Trust Distributions Guide here.

Our Great Lawyer Guarantee

We want to be part of your team over the long term. We'll achieve this by sticking closely to the following principles:

  • We'll listen carefully to understand what you want to achieve. Then we'll thoroughly explain our advice and step you through the documents. You can be sure you'll know the full consequences.
  • Our lawyers work as a team, so someone will always be available to answer your questions, or point you in the right direction. You will also benefit from a range of perspectives and experience.
  • One of our key goals is to pass on as much knowledge as we can, so you can make your own informed decisions. We want to make you truly independent.
  • We only do what we're good at. You can be confident that we know what we're doing and won't pass on the cost of our learning.
  • For advice and documents, we provide a fixed or capped quote so you don’t take price risk. If you're in a dispute, we'll map out the process and costs so you know what to expect.
  • We're not in this game for our egos. We're in it for a front row seat to witness your success

We measure our success on how efficiently we have facilitated your objectives, enhanced your relationships, and reduced the level of stress for all involved.

If we sound like people you can work with, call us now on 1300 654 590 and speak directly with a great lawyer.

Call 1300 654 590 and speak with a lawyer

You’ll be put straight through to a great lawyer who will guide you to the right solution.