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The ATO has outlined what types of information beneficiaries should be given to help them comply with their obligations.
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ATO issues reminder on upcoming changes for trust tax returns
08 May 2024
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The ATO has warned tax professionals and their clients about the income tax reporting changes coming into effect on 1 July as part of the Modernisation of Trust Administration Systems.
The changes will impact small business owners who are trustees or trust beneficiaries.
As part of the changes, the ATO has introduced a new trust income schedule, which all trust beneficiary types who receive trust income will need to lodge with their tax return.
The ATO also previously announced that it will be adding four capital gains tax (CGT) labels into the trust tax return statement of distribution.
In a recent update, the Tax Office said the information contained in the statement of distribution section of the tax return will provide beneficiaries everything they need to complete their trust income reporting obligations.
The ATO recommends that trustees provide this information to beneficiaries to help them with their obligations.
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“Beneficiaries should look out for the trust income schedule. This is a new form that you lodge with your tax return. We’ve replicated the fields from the statement of distribution, so all you need to do is copy the information across,” the Tax Office said.
“Remember, you’ll need to get the information required in the trust income schedule from the trust. We recommend that you ask the trustee for a copy of the trust statement of distribution.”
Where beneficiaries receive a distribution of trust income from a managed fund, the ATO said this should also be included in the new trust income schedule.
“The trust income schedule instructions will show you how the information on the tax statement provided by the managed fund is reported on the trust income schedule,” it said.
The ATO said the modernisation of trust administration project aims to streamline the taxpayer lodgment experience and improve the quality, accuracy and integrity of annual income tax return information reported by trustees and beneficiaries.
It will also enable the ATO’s compliance activities to be better informed, the regulator said.
“We'll implement further changes as the MTAS project progresses, and keep you informed of what those changes mean for you,” the ATO said.
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