It’s coming to the pointy end of the financial year and if you have a discretionary (or family) trust, then you have more decisions (and paperwork) to make prior to 30 June 2024.
A discretionary trust is what it says on the ‘tin’. It means the trust has the ability (or discretion) to distribute income to the beneficiaries (that’s you) in a different way each year. Who is deemed a ‘beneficiary’ (again that’s you) is outlined in your trust deed. Now I’m hoping you all still have your trust deeds!
It’s a requirement for any discretionary/family trust to make a resolution before 30 June each year that outlines who will receive income from the trust. If a trust fails to make this resolution, then the trust will be taxed at the highest tax rate of 47% on the trust income.
So you can see why it’s important to resolve (before 30 June) how the income from the trust will be distributed by way of a Trust Resolution. Even if the trust hasn’t earned any income during the year, it must prepare a Trust Resolution.
The good news is, the income (from the trust resolution) doesn’t need to be physically distributed before 30 June.
Over the next week, if you have a Trust, you will be receiving a reminder email from us in relation to the above. As always we’re here to help.
Author
Kim Jay
