The ATO has reminded trustees who make beneficiaries entitled to trust income by way of a resolution that they must do so by the end of the year (ie 30 June). It said the resolution will determine who is to be assessed on the trust’s taxable income.
The ATO said trustees should consult the relevant trust deed and comply with the requirements of the deed (ie if the deed requires that a resolution be made earlier than 30 June, the deed should be followed). It said there is no standard format for resolutions and the most important thing is for the resolution to establish, in one or more beneficiaries, a present entitlement to the trust income.
In addition, the ATO said the trust deed will determine whether a resolution is required to be recorded in writing. However, it said a written record is essential for those taxpayers who want to effectively stream capital gains or franked distributions for tax purposes.
[LTN 100, 27/5/13]