Urgent Reminder for Trusts: Finalise Your Trust Distribution Resolution Before 30 June 2025
If you operate a discretionary trust (also known as a family trust), there’s a crucial deadline approaching that could significantly impact your tax bill.
To avoid unnecessary tax of up to 47% on your trust’s income, you must prepare and sign a Trust Distribution Resolution before 30 June 2025.
Here’s why it matters — and how we can help.
What Happens If You Don’t Prepare a Resolution?
If the trustee of your trust doesn’t make a valid resolution to distribute income before the end of the financial year, the ATO may tax the income at the highest marginal rate — currently 47%.
That’s a far cry from the lower individual tax rates usually applied to beneficiaries.
Simply put, failing to take action could cost your trust thousands in avoidable tax.
What Is a Trust Distribution Resolution?
A Trust Distribution Resolution is a formal decision made by the trustee that sets out how the trust’s income will be distributed among its beneficiaries for the financial year.
This needs to be:
- Based on a clear understanding of the trust’s estimated income
- Aligned with your Trust Deed
- Completed and signed before 30 June each year
It’s not just a compliance box to tick — it’s an essential step in effective tax planning for trusts.
How Sharp Accounting Can Help
Preparing these resolutions isn’t always straightforward. That’s why we take care of the entire process for you, ensuring everything is accurate and in line with ATO requirements.
Our process includes:
- Reviewing last year’s Trust Distribution Resolution
- Estimating this year’s trust income with your input
- Reviewing your Trust Deed to confirm the income and distribution clauses
- Advising on the most tax-effective way to allocate income
- Preparing the official resolution and ensuring it’s signed on time
Don’t Leave It to the Last Minute
The closer we get to 30 June, the less time there is to prepare properly. We recommend booking a review now so you don’t rush decisions or risk non-compliance.
Book Your Planning Session Now
If you have a family trust and want to avoid unnecessary tax, now is the time to act.
Sharp Accounting can guide you through the process, ensure your resolution is completed correctly, and help you make the most of your trust’s income before 30 June 2025.
Contact us today to get started and ensure your trust is set up for a strong year-end outcome.
