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Changes that came into effect on 1 July aim to improve reporting and data accuracy and ease compliance.
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ATO issues reminder on trust administration revamp
03 July 2024
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7 minute read
Trustees, beneficiaries and practitioners lodging returns for trusts will have an improved experience this tax time due to recent changes in trust administration that have come into effect, the ATO says.
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The changes started on 1 July and included modifying four labels in the statement of distribution, introducing a trust income schedule for all beneficiary types and adding data validations to the trust tax return form.
Acting deputy commissioner Amy James-Velagic said the changes were being made as part of the ATO’s Modernisation of Trust Administration Systems (MTAS) project, first announced in the 2022 federal budget.
“As part of the ATO’s MTAS project, we will be delivering changes to tax returns for trustees and trust beneficiaries to improve their lodgment experience,” she said.
She said compliance for taxpayers would be easier under the changes.
“They’ll improve data accuracy reported by both the trustee and trust beneficiaries to enhance their interaction with the ATO, making it easier to comply.”
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The four labels changed on the statement of distribution section of the trust tax return were gross capital gain, capital losses applied, capital gains tax (CGT) discount applied, and CGT small business concessions applied.
“This will enhance their ability to appropriately notify beneficiaries of their entitlement to income,” James-Velagic said.
Trust beneficiaries would also encounter a new trust income schedule, which would need to be lodged with their tax return to improve reporting consistency across beneficiary types.
“For trust beneficiaries, the 2023–24 income year tax return will look different,” she said.
“This is a new schedule that will need to be lodged with their tax return.”
“We’ve replicated the fields from the statement of distribution, so all beneficiaries need to do is copy the information across. This will enhance their ability to appropriately notify beneficiaries of their entitlement to income.”
Finally, data validations have been added to the trust tax return form in the practitioner lodgment service. The ATO said this strengthened the integrity of data reported through the lodgment process.
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