Trustee Resolutions are important and can have significant consequences if not completed properly prior to 30 June each year.
If a Trustee fails to make a resolution to distribute the income of the Trust before the end of the financial year, the Trustee may be assessed by the Australian Tax Office on the Trust income at the highest tax rate of 49%.
IMPORTANT NOTE: Income includes Capital Gains. If you have sold a property or other asset during the year we recommend you contact our office to discuss the resolution.
What You Need To Do
Review the annual income for your trust (or trusts if you have a multiple trust structure) and advise our office before 15 June 2017.
a) If it is likely the TRUST WILL HAVE TAXABLE INCOME to distribute for the year ended 30 June 2017 then you will need a 2017 Trustee Resolution.
b) If it is likely the TRUST WILL NOT HAVE TAXABLE INCOME to distribute then you will not need a 2017 Trustee Resolution.
If you have any questions about this process please contact our office immediately. Failure to prepare a Trustee Resolution when one is necessary may result in the income of the Trust being taxed at 49%.
What We Are Doing
Despite the fact that preparing a trust distribution resolution before the end of the financial year can be quite complex, we need to comply with the interpretation of trust taxation laws.
The steps we need to undertake on your behalf include:
ü Review of your prior year Trust Distribution Resolution
ü Confirmation with you on the estimated Trust income of the trust for the year ended 30 June 2017
ü Review of your Trust Deed to ensure that the income definition and distribution clauses in you Trust Deed allow the proposed Trust Distribution Resolution for 30 June 2017
ü Advice about the most tax effective distribution of this estimated Trust Income
ü Preparation of Trust Distribution Resolution and ensuring it is signed by the Trustees PRIOR to 30 June 2017
In most cases we will limit our fee to $275 and seek your payment authority per the enclosed confirmation form. That way we can keep our cost to you as low as we possibly can. In some more complex circumstances, our fee may be higher. If, for example, you have a large capital gain during the year or if there are other complicating factors with your trust that warrant additional involvement. If this applies to you we will contact you once we have received your confirmation to proceed.
What Else we can do so you Pay Least Tax Possible
In the current political environment where government is increasing taxes, we strongly recommend clients take this opportunity to also review their overall tax minimisation strategies. Our qualified team can provide expert up to date advice on tax planning and often the cost of that advice is recovered through tax savings.
If you would like to find out more about our innovative tax planning strategies or have any queries in relation to your trustee resolution please feel free to contact our office.
Also make sure you keep up to date with our facebook page and blog for all the latest tax saving and business improvement information.