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AmyD(Initiate)Initiate
29 June 2021

Trust Resolution Question
Hello I just recieved this from my accountant and I am just wondering if this would hold up on an ATO audit. I have read through the rulings https://www.ato.gov.au/.../Trus.../Resolutions-checklist/... and I cannot work out whether it would be seen as as action taken prior to 30/06?
 
This is the email I received - PLEASE READ EMAIL BELOW
 
Dear Client,
This email is being sent to you as part or all of your financial/business affairs are operated through a trust. This email forms part of your compliance requirement in relation to your trust(s).
 
Operators of trust(s): It is VITAL you read this email in detail and respond as instructed!
 
The ATO is looking to ensure that all beneficiaries are ‘presently entitled’ to the income of the trust. To do this, the trustee(s) must resolve the split or distribution of trust income on or before 30 June. In practical terms, this is nearly impossible in most cases, as we (the accountant) determine the distributions when we prepare your financial accounts and tax returns after the 30th June. The design of our minutes enables us to pre-empt them, however the ATO is looking for evidence that a meeting is held (even if verbal) by the trustees on the 30th June.
 
A ‘Trust Resolution’ is a documented decision made by the trustee of a trust, deciding on the income that will be distributed to the beneficiaries of the trust for the financial year. A meeting MUST be held by the trustee(s) on or before June 30th, 2021 formulating the details of the trust resolution.
 
WHAT DO YOU NEED TO DO as the trustee of the trust.
You simply need to reply to THIS email, on or before the 30th June stating that all the trustee(s) or directors of the Corporate Trustee (trustee company) have had a trustee meeting to discuss and decide the distribution of income for the 2021 financial year. This meeting can be either in person or by phone but must involve all the trustees, members or directors.
Your reply should state: -
“We the trustees of our trust met on (insert date of June) in person or by phone (whichever is applicable) and we discussed and decided on the trust income distribution for 2021”

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1,316 views
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JodieR_ATO(Community Support)Community Support
1 July 2021

Hi @AmyD,

Whilst we cannot comment on an ATO audit if one were conducted, we can advise you should follow the directions provided in the email and reiterated by your accountant. As a trustee of a trust, it is your responsibility to ensure compliance measures are met. As explained, you may need to provide evidence that a meeting was held (even if verbal) by the trustees by the 30th June. A 'Trust Resolution' is a documented decision made by the trustee of a trust, deciding on the income that will be distributed to the beneficiaries of the trust for the financial year. A meeting MUST be held by the trustee(s) on or before June 30th, 2021 formulating the details of the trust resolution.

All the best.

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Most helpful reply

JodieR_ATO(Community Support)Community Support
1 July 2021

Hi @AmyD,

Whilst we cannot comment on an ATO audit if one were conducted, we can advise you should follow the directions provided in the email and reiterated by your accountant. As a trustee of a trust, it is your responsibility to ensure compliance measures are met. As explained, you may need to provide evidence that a meeting was held (even if verbal) by the trustees by the 30th June. A 'Trust Resolution' is a documented decision made by the trustee of a trust, deciding on the income that will be distributed to the beneficiaries of the trust for the financial year. A meeting MUST be held by the trustee(s) on or before June 30th, 2021 formulating the details of the trust resolution.

All the best.

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