5 Tips for trustee resolution compliance
The ATO has advised that, in the lead-up to 30 June, trustee clients who wish to make beneficiaries presently entitled to trust income for the 2023 income year should ensure their trustee resolutions are effective.
This includes where trustees may want to make beneficiaries ‘specifically entitled’ to franked dividends and capital gains included in that income (i.e. where trustees want to ‘stream’ those classes of income to certain beneficiaries).
It is important that trustee clients:
- check their trust deed to ensure that the intended beneficiaries are within the class of persons entitled to trust income (or of trust capital, if they intend to stream a capital gain that is not income of their trust) and are not excluded from being beneficiaries;
- comply with any requirements in the trust deed that concern how to validly ‘appoint’ (or distribute) trust income to beneficiaries;
- recognise that, for tax law purposes, beneficiaries need to be made presently entitled to trust income by 30 June of the relevant year;
- are aware that, if they fail to do what is required in a trust deed, or fail to appoint income by 30 June, this may cause outcomes to arise that differ to what they intended. This could include other beneficiaries being assessed on the relevant share of the trust’s net (taxable) income (or the trustee being assessed at the top rate of tax), and
- ensure that resolutions are unambiguous.
Superannuation is one of those areas that can be compared to a cart on a rollercoaster. Its performance is constantly affected by the economic climate and shifting legislation that alters the benefits individuals and businesses can gain from superannuation funds. Read more here about how Omnis Group can help.
Related reading
https://www.omnisgroup.com.au/blog/ato-warning-to-smsfs-paying-the-price-for-non-compliance/
