In the lead-up to 30 June 2021, we want you to be aware that you need to complete your trust distribution resolutions before 30 June. Why? 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 YOU NEED TO DO…
The steps required, include:
● Review of your prior year Trust Distribution Resolution
● Confirmation 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
● Consider 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
Preparing appropriate trust distribution resolutions can be quite complex. If you need our assistance, please don’t hesitate to contact us.
Our trust distribution resolution service starts from $200 plus GST.
NEXT STEPS
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.
