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ARTICLE · 27 JUNE 2022

2022 EOFY trust distributions: handle with care

McCullough Robertson
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Trustees should be careful of proper trust distributions, so that trust income is not taxed at the top marginal rate.

AustraliaCorporate/Commercial Law
Melinda Peters
Melinda Peters
Adria Askin
Adria Askin
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One of the perennial items on everyone's end of financial year checklist is the proper execution of trust resolutions, ensuring that trustees are not taxed on trust income at the top marginal rate (45%).

For family trusts in particular, these distributions often require additional consideration prior to the end of this financial year following some of the most significant clarifications of the law (or the ATO's approach to the taxation of trusts) since Bamford in 2010, the legislative amendments for streaming capital gains and franked dividends in 2011, or the requirement to finalise trust resolutions pre-30 June in 2012.

Trustees should bear in mind the impact of the following important clarifications on this year's end of financial year distributions:

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