Model different trust income allocations between beneficiaries and estimate how the distribution pattern may affect the tax position before resolutions are finalised.
Trust taxation depends on the trust deed, the character of income and which beneficiaries are presently or specifically entitled to amounts for the income year. A calculator can help compare scenarios, but it cannot create a beneficiary entitlement or replace the trustee’s resolution and supporting records.
Capital gains and franked distributions can be subject to specific streaming rules, and amounts not effectively allocated can result in the trustee being assessed in some circumstances. Section 100A and other integrity provisions may also be relevant to arrangements involving trust distributions. Use this tool to explore the numbers early, then check that any proposed distribution is permitted by the deed and properly documented before the relevant deadline.
Understand why trust deeds, present entitlement and income character matter as much as the numbers.
No. A trustee can only distribute or appoint income in accordance with the trust deed and trust law. The person or entity must fall within the relevant beneficiary class and the trustee must exercise its discretion validly.
No. The calculator only models an allocation. A valid tax outcome depends on the trustee’s actual resolution, the trust deed, the accounts and the relevant tax rules.
In some cases, yes. Where the trust deed and tax rules permit, capital gains and franked distributions can be streamed by making beneficiaries specifically entitled to those amounts. Detailed requirements apply.
The trustee can be assessed on trust net income that is not assessed to a beneficiary, depending on the circumstances and the provisions that apply. Trustee tax rates can be significant, so unresolved amounts should be reviewed before year end.
Many discretionary trusts need valid resolutions made by the end of the income year, although the trust deed can impose its own requirements. Early review allows time to confirm beneficiaries, income character, accounts and documentation rather than relying on a last-minute allocation.
SMH Accountants & Advisors can help review the trust accounts, deed and proposed allocations before the trustee finalises the year-end distribution.
