As the financial year wraps up, trustees are under the pump to make sure their trust obligations are ticked off properly. From resolutions to record-keeping, it’s essential that everything is documented and submitted on time to avoid any nasty surprises from the ATO. Whether you’re a seasoned trustee or new to the role, this EOFY checklist for trustees will help you stay compliant and reduce stress.
1. Finalise Trustee Resolutions by 30 June
Ensure all trustee resolutions regarding income distribution are completed by 30 June. This is crucial to determine which beneficiaries are presently entitled to trust income and how that income is taxed. Late or unclear resolutions can result in the trustee being taxed at the top marginal rate, so timely documentation is essential.
2. Review and Update Trust Records
Trustees need to maintain up-to-date and accurate records, including:
- A complete copy of the trust deed (and any amendments)
- Financial statements
- Minutes from trustee meetings
- Beneficiary details
Good record-keeping supports the validity of resolutions and makes tax time easier for everyone involved.
3. Confirm Beneficiary TFNs
Before making distributions, make sure each beneficiary has provided a valid Tax File Number (TFN). If a TFN isn’t provided, the trustee could end up paying tax at the highest rate on that share of income.
4. Prepare for Tax Return Lodgment
Trustees should begin preparing all necessary documentation now to ensure a smooth tax return process. This includes:
- Accurate records of all income and expenses
- Clear distribution statements
- Any capital gains or losses
Being prepared reduces the risk of errors or penalties at lodgment time.
5. Consult a Tax Professional
Trust structures are complex, and EOFY can throw in even more moving parts. It’s a great time to speak with an advisor about matters such as:
- Income streaming
- Asset revaluations
- Any planned changes to the trust
A professional review can give you peace of mind and reduce your compliance risk.
Stay Compliant and Confident this EOFY
If you’re needing help with this year’s EOFY checklist for trustees, the Cotchy team is here to support you. We’ll make sure you’re compliant, well-prepared, and ready to tackle the new financial year with confidence. Contact us today!
Source: ATO