Topics on trust distributions (2)

Reporting Requirements for Closely Held Trusts

When a closely held trust distributes income or capital to a trustee beneficiary, the trustee usually needs to submit a report to the ATO, known as a 'correct TB statement,' under sections 102UK and 102UT. This report is required if the distribution contains:

1. Untaxed Amount: This is the trustee beneficiary's share of the trust's net income that hasn't been taxed elsewhere.
2. Tax-Preferred Amount: This includes income and capital of the trust that isn't part of its taxable income.

What the Correct TB Statement Includes:

• Details of untaxed and tax-preferred amounts in the distribution.
• Beneficiary's name and tax file number (if they're a resident) or name and address (if non-resident).

How to Submit: The trustee includes the correct TB statement in the trust tax return, specifically in the 'Statement of distribution.' It must be lodged by the return's due date unless the ATO grants an extension.

Tax Warning for Multiple Beneficiaries: If the closely held trust distributes to multiple trustee beneficiaries, each beneficiary usually requires a separate correct TB statement.

These rules ensure proper reporting of trust distributions to beneficiary trustees and help maintain tax compliance.

Should you have any questions or need assistance, feel free to reach out to                            Tax Ideas Accountants & Advisers at +61 2 83181545 or book an appointment through our live calendar.

• Topics on trust distributions (1)
• Topics on trust distributions (3)
• Topics on trust distributions (4)
• Topics on trust distributions (5)
• Topics on trust distributions (6)