Updated November 12th 2013

There are new ATO Rules for trustees from the 2011-12 financial year onwards, requiring all trustees to determine trust beneficiaries by the way of a resolution, by 30 June 2012. Trustees should also note that some trust deeds require a resolution to be made on a date prior to 30 June such as 28 June. Accordingly each trustee should carefully check the trust deed provisions prior to resolutions being made.

There is no standard format for a trustee resolution. The ATO will allow a note to be made prior to 30 June 2012 which determines one or more beneficiaries, with the intention of the trustees to formalise this resolution at a later date by an official minute which refers to this work or resolution.

The ATO has determined that if a trustee is required to distribute franked dividends or capital gains, these resolutions must be made in writing by 30 June and 31 August respectively. A resolution is not required to determine the exact amount payable to each eligible beneficiary, but a valid resolution should include the methodology of the distributions such as:

  • Details of the respective percentages to be paid to each beneficiary
  • Specify an amount to a particular beneficiary and then apportion the balance of income on a percentage basis

If there is no valid resolution made by the trustee at 30 June 2012, then the trustee may be liable for the tax on trust income which will be assessed at the highest marginal rate plus Medicare Levy.