Trusts, timing and getting it right

Trustees (or directors of a trustee company) need to decide on the distributions they plan to make by 30 June 2017 at the latest. It’s also important to check your trust deed – most trust deeds require resolutions to distribute trust income to be made by 30 June each year. Decisions made by the trustees should be documented in writing by 30 June 2017.

If valid resolutions are not in place by 30 June 2017, there is a risk that the taxable income of the trust will be assessed in the hands of a default beneficiary (if the trust deed provides for this) or the trustee (in which case the highest marginal rate of tax would normally apply).

It’s not essential for distributions to be paid by 30 June, but the trustees need to decide on the distributions that need to be made.

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