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The ATO has provided details on tax return changes for the 2023–24 year as part of the modernising trust administration project.
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ATO flags trust administration changes ahead of 1 July
15 April 2024
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In a recent update, the ATO has outlined trust administration changes commencing 1 July 2024 that will apply to trustees, beneficiaries and tax agents.
The changes are being made as part of the Modernisation of Trust Administration Systems (MTAS) project which was first announced in the March 2022 budget.
“The MTAS project will deliver changes to annual tax return forms, to simplify reporting for trustees, beneficiaries and their tax agents. Changes will begin on 1 July 2024, affecting lodgements for the 2023–24 income year and onwards,” the ATO said.
The changes include modifying the labels in the statement of distribution, which is part of the trust tax return. The ATO said the modifications will improve the reporting of beneficiary details.
A new schedule will also be introduced, the trust income schedule, which all trust beneficiary types who receive trust income will need to lodge with their tax return.
“This will assist correct reporting and facilitate consistency of reporting across all beneficiary types,” the ATO said.
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The Tax Office said the new schedule won't replace existing trust income labels in beneficiary income tax returns.
The new schedule is intended to support existing reporting obligations:
- For individual beneficiaries, and will be incorporated into the existing income details schedule
- For non-individual beneficiaries – via a new schedule lodged with each beneficiary's income tax return.
“Beneficiaries will be able to get the information required in the trust income schedule from the trust,” the ATO said.
“As the trust income schedule has been designed to align to the information on the trust statement of distribution, you should encourage your trustee clients to provide beneficiaries the information required to complete the trust income schedule as early as possible, to assist them to complete their tax return.”
New data validations will also be added to the trust tax return in the practitioner lodgment service to strengthen the integrity of data reported through the lodgment process.
“These changes mean you'll no longer be able to submit without completing the necessary information,” the ATO warned.
The ATO said the 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, it 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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