The trustee is generally liable to pay tax on:
- that part of the net income of the trust that has not been assessed to either a presently entitled beneficiary or the trustee on behalf of a presently entitled beneficiary, see Is a beneficiary presently entitled to a share of the income of the trust estate?
- shares of the net income of a trust in respect of beneficiaries, whether or not the beneficiaries are acting in their capacity as trustee of another trust estate, who are presently entitled to a share of the income of the trust estate but are non-resident at the end of the income year, see Non-resident beneficiaries – additional information
- shares of the net income of a trust in respect of beneficiaries who are presently entitled to a share of the income of the trust estate but are under a legal disability, see appendix 10
- if the trust is a special disability trust and the principal beneficiary is an Australian resident at the end of the income year, the whole of the net income of the trust
- if an election has been made for the trustee to be assessed on a capital gain of the trust, the amount of the capital gain.
The rate of tax payable by the trustee will depend on the type of trust and the beneficiary's individual circumstances.
If the beneficiary is presently entitled to a share of the income of the trust estate, not under a legal disability, and is a resident at the end of the income year, then the beneficiary, not the trustee, is generally taxed on that same percentage share of the net income of the trust. This amount may be different if any beneficiary or the trustee has been made specifically entitled to an amount of franked distribution or capital gains (i.e. the capital gain or franked distribution has been streamed to a particular beneficiary).
If the trustee is liable to pay any tax, print X in the Yes box at this item even if payments have been made in advance. Otherwise, print X in the No box.
Net income means the total assessable income calculated as if the trustee was a resident taxpayer, less all allowable deductions, except deductions for net farm management deposits, for more information see appendix 10. In the case of any beneficiary with no beneficial interest in the trust corpus, past losses are required to be met out of corpus.
Request for a non-taxable advice
If the trustee is not assessed on income and a non-taxable advice is required, provide a request on a separate sheet of paper headed ‘Request for a non-taxable advice’ and include the trust name and TFN with the details. Sign the request, attach it to the tax return and print X in the Yes box at Have you attached any ‘other attachments’? at the top of page 1 of the tax return.