ATO advice regarding year-end trustee resolutions


The ATO has advised that, in the lead up to 30 June, trustee clients who wish to make beneficiaries presently entitled to trust income for the 2023 income year should ensure their trustee resolutions are effective. 

This includes where trustees may want to make beneficiaries ‘specifically entitled’ to franked dividends and capital gains included in that income (i.e., where trustees want to ‘stream’ those classes of income to certain beneficiaries).

It is important that trustee clients:

  • check their trust deed to ensure that the intended beneficiaries are within the class of persons entitled to trust income (or of trust capital, if they intend to stream a capital gain that is not income of their trust) and are not excluded from being beneficiaries;
  • comply with any requirements in the trust deed that concern how to validly ‘appoint’ (or distribute) trust income to beneficiaries;
  • recognise that, for tax law purposes, beneficiaries need to be made presently entitled to trust income by 30 June of the relevant year;
  • are aware that, if they fail to do what is required in a trust deed, or fail to appoint income by 30 June, this may cause outcomes to arise that differ to what they intended. This could include other beneficiaries being assessed on the relevant share of the trust’s net (taxable) income (or the trustee being assessed at the top rate of tax); and
  • ensure that resolutions are unambiguous.

‘Side hustles’ in the ATO’s sights

Editor: A recent ATO article highlights the fact that it is increasingly trying to bring more modern techniques of money-making into its tax net . . .

‘Side hustles’ have really grown over the past few years — everything from the gig economy and drop shippers, to content creators and influencers.

The ATO recognises that it can be hard to know how to treat income when earning money from side hustles, especially when an individual has several, so the ATO has prepared some tips.

First, the individual needs to know if they are ‘in business’.  If so, they may need to think about registration and tax obligations.  If they are not in business, but are looking to start one, they should know how to “set themselves up for success”.

Also, if a side hustle means the individual is now a director of a company, they must make sure they apply for a director ID (which is free).

Editor: Please contact our office if you require any assistance in relation to your ‘side hustles’.