Assessment of Additional Net (Taxable) Income in Simms Discretionary Trust

Key Points about Trust Resolutions

Timing Requirements:

• Trust income must be distributed by 30 June (or earlier as per trust deed) to avoid trustee assessment or default beneficiary clause.
• Written records are crucial, especially for streaming capital gains or franked dividends.

Documenting Trust Resolutions:

• Trust deed determines if verbal resolutions are allowed.
• Verbal resolutions can be acceptable but should be documented promptly.
• Corporate trustees must prepare a minute within one month of the meeting.

Best Practices:

• Prepare, sign, and date resolutions by 30 June to avoid disputes with the ATO.
• Promptly produce resolutions if relevant to legal proceedings to avoid exclusion from objections.

Lesson from Dalby's Case:

• Failure to produce or raise the resolution promptly can lead to exclusion from objections.

Tax Tip: It's best to document trust resolutions promptly to avoid disputes and legal complications, especially if they're relevant to tax assessments.