A trust receives a dividend of say $30,000 with $12,857.
The associated family has a young child (aged 10) with a disability.
1) Is the trust able to distribute to the minor under a disability and have the trustee taxed at marginal rates?
2) Does the minor need a TFN?
3) Do we need to lodge a tax return for the child or does the trustee receive the refund to be disbursed to the family?
Many thanks.
Howdy @Calc,
Probably best to contact the good folk of the NDIS to discuss that with them.
Hi @NickZed
We're exploring this with our trust area. We'll get back to you as soon as we can.
Hi @NickZed,
The trust is able to distribute to a minor under a disability if the minor is a beneficiary of the trust.
Where a beneficiary under a legal disability (such as a minor) is presently entitled to a share of the net income, then the trustee is assessed under section 98 of the ITAA 1936 on the beneficiary’s share of the net income as if it were the income of an individual taxpayer.
If the minor is an excepted person, the minor’s share of the net income of the trust is taxed at the normal individual rates. If the minor is not an excepted person, the income generally is taxed at the highest marginal tax rate, plus Medicare levy.
While the trustee being assessed under section 98 of the ITAA 1936 can claim imputation credits as a tax offset, subject to the integrity rules, they are not eligible for a refund of excess imputation credits. If the beneficiary is also assessed on the trust income, the beneficiary can claim the imputation credit included in the trust income (if the beneficiary is an eligible resident beneficiary) and any excess imputation credits would be available to the beneficiary as a refund. The beneficiary also receives a credit for the tax paid or payable by the trustee.
To claim a refund for franking credit on behalf of the minor, you can lodge a tax return or complete an Application for refund of franking credit. While the minor does not have to have a TFN, there are some consequences and limits when the minor does not have one.
As trusts are complex, for advice tailored to your situation, you may wish to get tailored technical assistance from us or seek professional advice.
Hi,
Just following on from your above reply - if a trust distributes to a beneficiary who is a minor under legal disability, would the distribution effect the minor's NDIS payments?
Howdy @Calc,
Probably best to contact the good folk of the NDIS to discuss that with them.
No it wont. NDIS isn't means tested. It might impact things like Disability allowance or payment or if over 16 disability pension.
15 Apr 2026 · 4 min read time
16 July 2025 · 5 min read time
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