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BigNeil(Newbie)Newbie
12 May 2025

I intend setting up a family trust next FY. My daughter, who will be one of the (3) beneficiaries, turns 18 in August 2025. Can I set the trust up before she turns 18 but avoid making any payments to her until she turns 18 to ensure we are not paying the penalty tax rate applied to minors receiving unexpected income over $416 ? How does the ATO verify the income was only distributed from the trust once the beneficiary turned 18 ? Thank you.

716 views
3 replies
716 views
3 replies

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Bruce4Tax(Taxicorn)Taxicorn
13 May 2025

Beneficiary entitlement is determined on 30 June each year, so you would not want to include her in your 2025 distribution minute.


Date cash is paid after 30 June is not relevant.


BigNeil(Newbie)Newbie
14 May 2025

Thanks Bruce4Tax. Does the June 30 rule apply to trust distributions specifically or does the June 30 test apply more generally to all 'unexpected' income earned by someone turning 18 years of age during a Financial year ?

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