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  • Trustee obligations on our radar: TFN reports

    If you're a trustee, the Trust tax return and associated schedules are your primary lodgment obligations, but there are other lodgment and reporting obligations that you need to meet.

    We’re currently reviewing adherence to certain trustee obligations. Obligations we’re reviewing include the lodgment of Tax File Number (TFN) reports for TFN withholding for closely held trusts.

    Beneficiaries are required to quote their TFN to trustees to avoid having tax withheld from payments or unpaid present entitlements. Where TFNs are quoted, trustees are required to provide us with a TFN report for each beneficiary. You must lodge a TFN report for a quarter in which a beneficiary quotes their TFN to you.

    The TFN withholding rules require trustees to withhold amounts from distributions made to beneficiaries where they have not quoted their TFN to the trustee. In these cases, the trustee must:

    • withhold tax at the rate of 47% from the distribution
    • pay this tax to us
    • report in an annual report details of all withheld amounts.

    Failure by a trustee to withhold tax from a distribution may result in the trustee becoming liable for a failure to withhold penalty, the amount being equal to the amount that they failed to withhold.

    See also:

    Last modified: 17 May 2019QC 58943