For those businesses that trade out of a Discretionary (Family) Trust it is an annual mandatory requirement of the ATO that all Discretionary Trusts prepare a Trustee Resolution Minute before 30 June each year.
The Minute outlines who is going to be allocated the income of the trust.
Without this Minute, the ATO will allocate all income of the Trust to the Primary Beneficiary as shown in the Trust’s Deed, or if there is no Primary Beneficiary listed on the Trust’s Deed, the Trustee of the Trust will be taxed at the highest marginal tax rate plus Medicare levy.
As you can see, the tax consequences could be significant, which makes this Trustee Resolution Minute all the more important.
Ensure your minutes are in order as we count down to 30 June.