TFN withholding for closely held trusts

Key features of the rules

From the first income year that starts on or after 1 July 2010:

• beneficiaries may quote their TFN to the trustee to avoid having amounts withheld from payments made by trustees
• when a beneficiary has quoted their TFN to the trustee, the trustee must lodge a TFN report, which is due on the last day of the month following the end of the quarter in which the TFN was quoted
• the trustee must also lodge an Annual trustee payment report containing details of all payments made to beneficiaries in the income year - this report is lodged by completing information on the trust tax return for the year
• if a beneficiary does not quote their TFN to the trustee before a payment is made to them, the trustee must
• withhold from that payment - and any future payments unless a TFN is quoted
• lodge an Annual TFN withholding report containing details of all payments that were subject to withholding and any withheld amounts
• provide a payment summary to the beneficiary
• register for pay as you go (PAYG) withholding for closely held trusts
• pay any withheld amounts to us
• beneficiaries can claim a credit on their income tax return for any amounts withheld.