Trusts – 2021 Year End Tax Planning Series
As we move towards the end of the 2021 financial year, it is a good idea to start considering what tax planning strategies to put in place now to minimise your tax liability. In the sixth part of this eight-part series, we will outline a number of suggestions that may assist trustees to legitimately minimise or defer their taxation exposure.
Please note these suggestions are of a general nature only and should not be relied upon without seeking specific personal advice. With 30 June fast approaching, you need to act quickly, and we encourage you to contact our office on 1300 620 345 to schedule a meeting as soon as possible to assess your options and discuss the steps you need to take.
Trustees of discretionary trusts need to consider which beneficiaries they will make presently entitled to the income or capital of the trust on or before 30 June. The trust deed should be reviewed to consider how trust income is to be determined and to which beneficiaries’ income can be distributed.
Trustee Resolutions on how the income from the trust is distributed to the beneficiaries are prepared and signed before 30 June for all discretionary trusts. If a valid resolution has not been executed by this date, the default beneficiaries become entitled to the trust’s income and are then subject to tax. Income derived but not distributed by the trust will mean the trust will be assessed at the highest marginal rate on this income.