In late February 2022, the ATO released tax policy changes that would stop the usual trust distributions to family members. This is one of the most important developments in trust taxation in over 20 years.
For many years, it has been a common practice for people using Family (Discretionary) Trusts to spread trust income among family member beneficiaries. For asset protection and estate planning purposes, trust distributions are often distributed to adult children, which results in lower tax rates for the entire family.
However, in late February 2022, the ATO released tax policy changes that would stop the usual trust distributions to family members. This is one of the most important developments in trust taxation in over 20 years.
These changes will affect your taxes in 2022 and future years! !
The latest ATO change policy is as follows:
- The distribution of income from the trust to family members may decrease.
- The amount of tax payable on a household basis will increase.
On 23 February 2022, the ATO changed this policy. This is because the ATO believes that after the trust income is distributed, some adult children will return the income to their parents, which is illegal tax avoidance!
As a result, the ATO plans to abolish trust distributions and charge trustees a 47% tax on the distribution amount, with possible penalties.
If you need help, please contact us and we will provide you with:
- Comprehensive family trust review.
- Analyze your past family trust distribution patterns.
- Review the current 2022 estimated taxable income for your entire family business (including any companies and trusts you own).
- Provides an informative report of Tax Payable and Trust Distributions.
- One-on-one guidance and advice on tax planning for 2022.
The above work will take about 1 day of work and our accounting team will do 1 to 1 service. Please book here
Our service fee is $330/h and our accounting team only serves one client at a time. This ensures that you can carefully plan your projected 2022 and 2023 taxes and pay the minimum tax legally.
Please note that this is preliminary advice for your 2022 tax planning and the above will not violate any new ATO policies.
Contact us today to discuss how we can help you better understand your financial results and their implications for your business so your decision-making is more informed.
Email: [email protected]
Phone: 07 5512 6106
Address: Unit 14 City Pods,249 Scottsdale Drive, Robina QLD 4226