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Shares in trust from a will and franking credits

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Newbie

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Replies 2

Hi

I am the trustee for some shares (Imputation trust) that were left to my 2 children by my late father.  Only a few thousand each.

For the previous 8 years the executor of the will was the trustee, but has passed the trusteeship to me due to ill health.

 

Unfortunately he was uncooperative and to no action has happened to the shares during his time. Over this time each year $70-100 franking credits have not been claimed.

 

I have the tax statements for this period(8 years) and have downloaded the forms to make the claims.

 

My question is.

  1. Should I claim the franking credits for the last 8 years on behalf of my children using my TFN as trustee and  pass on to them, or do I have it paid direct to them using their TFN ?
  2. One of the 3 children has now reached 21 so I hope she can claim the credits herself now the shares/fund is in here name.
  3. All children earn below the tax free threshold.
  4. The will says the proceeds and up to half the principal can be used for the beneficiaries advancement to this shouldn’t interfere with the trust.
  5. Do you think the fact that the trustee name has changed over the years will be an issue (ie Joe Blogs AFT for XY Blogs)

 

Thanks

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Most helpful response

Anonymous

Replies 1

 You have a far more complex set of circumstances than you realise, and you have to proceed very carefully with this.

 

As you probably know, as the Trustee you have to abide by the Trust deed, law or trusts and the Taxation legislation otherwise you are going to get yourself in a lot of difficulties.

 

 

For example - You simply not claim those frankin credits in your own personal taxation return and then distribute, this could be  a contravention of the trust deed and taxation law, ....

 

Also, if you have claims going back a few years the only way to claim them is by amending prior year returns, which in this case could involve amending the Trust returns.

 

The better way forward with this is to apply to the ATO for a Private Ruling  and this will assist you to get it right the first time and also give you the opportunity to discuss with the ATO officer that will provide the response.

 

Alternatively you can get some advice from an tax professional.

 

Here is some light reading:

https://www.ato.gov.au/Individuals/Deceased-estates/Doing-trust-tax-returns-for-a-deceased-estate/Wh...

 

If you need assistance completeing the Ruling phone the ATO on 13 28 61

 

 

 

2 REPLIES 2

Most helpful response

Anonymous

Replies 1

 You have a far more complex set of circumstances than you realise, and you have to proceed very carefully with this.

 

As you probably know, as the Trustee you have to abide by the Trust deed, law or trusts and the Taxation legislation otherwise you are going to get yourself in a lot of difficulties.

 

 

For example - You simply not claim those frankin credits in your own personal taxation return and then distribute, this could be  a contravention of the trust deed and taxation law, ....

 

Also, if you have claims going back a few years the only way to claim them is by amending prior year returns, which in this case could involve amending the Trust returns.

 

The better way forward with this is to apply to the ATO for a Private Ruling  and this will assist you to get it right the first time and also give you the opportunity to discuss with the ATO officer that will provide the response.

 

Alternatively you can get some advice from an tax professional.

 

Here is some light reading:

https://www.ato.gov.au/Individuals/Deceased-estates/Doing-trust-tax-returns-for-a-deceased-estate/Wh...

 

If you need assistance completeing the Ruling phone the ATO on 13 28 61

 

 

 

Newbie

Replies 0

Thanks for you response.

There is no trust deed as the shares are held in trust due to the will.  The shares were not part of a trust, apart from being the companies product " Imputation trust". (ANZ OneAnswer ING Blue Chip Imputation Trust )

There were no proceeds distributed as the proceeds were reinvested in the trust(product  Imputation trust)
But there were franking credits witch could have been claimed by the beneficiaries but were not.
According to the ATO it is not necessary to do a return to claim a refund if you are not required to do a return as in this case for the children.
https://www.ato.gov.au/individuals/investing/in-detail/investing-in-shares/refunding-franking-credit...

This is probably beyond this forum I'll give the ATO a call.  Unfortunately using a tax advisor would cost half of the returns.