ato logo
Search Suggestion:

Distributions from trusts

Last updated 12 February 2019

Gross distributions from trusts may include unfranked dividends, franked dividends, franking credits (where entitled) attached to these dividends, and other assessable distributions. Show the different components of distributions from trusts at N to Q.

If the distribution includes an amount of foreign income, including New Zealand franking company dividends and supplementary dividends, show that portion of the distribution at D1 Gross foreign income and take it into account in calculating D Net foreign income.

Show any amounts subject to foreign resident withholding that were distributed to the fund from a trust. Show also the fund's share of credit from foreign resident withholding. You can claim a credit for the fund's share of credit from foreign resident withholding in the calculation statement at F2 Credit: foreign resident withholding item 12.

Include at N to Q payments received from a closely held trust (except if it relates to a net capital gain or foreign income). If amounts have been withheld from these payments because a TFN was not provided, then the credits for the withheld amounts should be claimed at F8 Credit: share of credit for TFN amounts withheld from payments from closely held trusts item 12.

Show all income received from stapled securities as trust distributions at N to Q, including the different components at the appropriate labels (see below).

Any amount you show at N to Q cannot be a loss.

Consider whether any distributions received from a trust are either from a trust in which the fund does not have a fixed entitlement to income or are part of a non-arm's length arrangement and whether the distribution received is greater than what might otherwise have been expected had the parties been dealing with each other at arm's length. See Taxation Ruling TR 2006/7 for further information. If the distributions received are either from a trust in which the fund does not have a fixed entitlement to income or are not at arm's length, do not show these distributions at N to Q. Show these distributions at U Net non-arm's length income.

Do not show capital gains received from a trust at Q Trust distributions other amounts. Show them at A Net capital gain. For information on how to show a capital gain received from a trust at A, for example, how to gross up a capital gain for a trust distribution, see Guide to capital gains tax 2011.

Do not show distributions from PSTs at N to Q.

To the extent that FTDT has been paid on income or capital of a trust to which the fund is presently entitled or which has been distributed to the fund, exclude that income or capital from the assessable income of the fund (section 271-105 of Schedule 2F to the ITAA 1936).

If the fund's share of trust income includes an amount received indirectly from a closely held trust on which TBNT has been paid, do not include the amount in the fund's assessable income.

Any losses or outgoings incurred in deriving an amount which is excluded from assessable income because FTDT or TBNT has been paid are not deductible. A tax offset cannot be claimed by the fund for any franking credits attributable to the whole or a part of a dividend that is excluded from assessable income under these provisions.

Even if the TOFA rules apply to the fund, show at N or Q all relevant distributions from trusts. This includes amounts in respect of financial arrangements subject to the TOFA rules.

If what you show a N or Q includes an amount brought to account under the TOFA rules, also complete item 16 Taxation of financial arrangements (TOFA).

Further Information

For more information, see Guide to the taxation of financial arrangements (TOFA) rules.

End of further information