Trust Distribution Minutes
15 June 2016
TRUST DISTRIBUTION MINUTES – THEY'RE REQUIRED BEFORE 30 JUNE!
Do you have a family trust? The ATO have tightened the requirements around the distribution of income. If you don’t follow the rules, you could end up paying a lot more tax than you intended.
Background
Your discretionary trust’s distributable income is the net income for tax purposes which beneficiaries will be entitled to receive, in accordance with the trust deed (rules of the trust). The allocation of your trust’s net income for the current financial year needs to be determined before 30 June, and trust minutes are used to inform the ATO of the allocation. These decisions and Trust Minutes must be done before 30 June each year.
ATO legislation stipulates that distributable income should be calculated prior to 30 June, and should the ATO request verification, signed trust minutes of the trustee’s resolution in this regard are required. In abiding by the ATO legislation, your trust distribution can avoid default beneficiaries unexpectedly becoming 'presently entitled' to the income and being taxed on it, or if there is no default beneficiary, avoid the trustee being taxed at the highest marginal tax rate (47% as at 2018).
Valid trust distribution minutes must provide clear methodology of the determination of each beneficiary’s entitlement. Therefore, it is important that the minutes are prepared accurately and with reference to your trust.
How we can assist you
At Mulcahy & Co we work closely with our clients to assist in the preparation of trust minutes that comply with the ATO requirements.
Generally, this requires the preparation of draft interim financial statements for your trust. We then use these figures to estimate the trust’s final net profit and calculate your trust distribution percentages. We will then prepare your trust distribution minutes for you to sign.
Upon the resolution of your trust’s net (distributable) income for financial year ending 2018, written minutes of this resolution will ensure that the ATO will have the information available as to the specified beneficiaries’ entitlements, ensuring trust income is not automatically taxed at the top marginal rate after 30 June 2018.
What should you do?
Arrange a trustee meeting with Mulcahy & Co without delay, to discuss trust resolutions for net income distribution, particularly if there are franked dividends and capital gains to be considered.
If you would like more information or need to discuss this tax incentive in more detail, please contact your Mulcahy & Co Business Advisor on 1300 204 781.
Latest News
Recovery support for people and communities affected by the Victorian fires that started on 7 January 2026. Victoria is facing severe bushfires throughout most of the state. A State of Disaster has been declared. Communities, farmers and businesses are facing heavy losses. The Victorian and Australian Governments are providing essential support to communities hit by the January bushfires. This aid will help with both immediate and long-term recovery needs. A summary of what if on offer is below: Financial Help for families Emergency Accommodation Long Term Recovery Help Clean-Up Help Help for Primary Producers and Farmers Counselling and Social Recovery Roads and community asset support Insurance Advice General Support Further information is available here: https://www.vic.gov.au/january-2026-victorian-bushfires
M Group Lending make Top 100 Broking Businesses list - nationwide. Our Lending team have been recognised in the Top 100 Mortgage Broking businesses through our aggregator LMG. This is an outstanding achievement as the list takes into account all mortgage broking businesses Australia wide. Well done to all our home loan brokers and their support team for their hard work and ultimate dedication to their clients! To chat to our team about your home loan, commercial loan or business loan needs - go to: www.mgroup.partners/lending-team
Our M Group mortgage brokers have made the Victorian Excellence List for 2025 for aggregator LMG. Read more.
We are excited to announce that Liam Nankervis is now a partner with the M Group. Liam works with our Lending team as a Finance Broker in our Geelong office and has been with M Group for over 6 years.
