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  • If no beneficiary is specifically entitled

    Capital gains and franked distributions to which no beneficiary is specifically entitled are allocated to beneficiaries and the trustee based on their proportional share of the remainder of trust income (excluding any franked distributions or capital gains any entity is specifically entitled to). This proportional share is known as their 'adjusted Division 6 percentage'.

    You will only need to allocate such capital gains and franked distributions if the trust's net income is greater than zero.

    Calculating the adjusted Division 6 percentage

    A beneficiary's adjusted Division 6 percentage is calculated as follows:

    The beneficiary's present entitlement to trust income, excluding any capital gains and franked distributions they are specifically entitled to

    divided by

    the trust income, excluding any capital gains or franked distributions to which any entity is specifically entitled.

    If the sum of the adjusted Division 6 percentages of all beneficiaries is less than 100%, the difference is the trustee's adjusted Division 6 percentage.

      Last modified: 22 Apr 2016QC 24534