The Modernisation of Tax Administration Systems (MTAS) program is set to deliver some significant milestones this tax time.
Pre-fill of trust distribution data
As you lodge 2026 trust tax returns for your trustee clients, the statement of distribution data will become available to pre-fill tax returns for individual beneficiaries. This will help those beneficiaries who:
- use a different tax agent to the trustee
- self-prepare their return using myTax.
When we've successfully matched the lodged data to beneficiaries, the trust distribution pre-fill data will be available in the beneficiary's tax return where the label V Assessment calculation code is '12' or '30'.
We encourage you to lodge your clients' 2026 trust tax returns as early as possible after 1 July 2026. This will maximise the available pre-fill for beneficiaries who may need it.
Statement of distribution changes
To support this initiative, we’ve added 3 additional labels to the trust tax return for 2025–26, in the statement of distribution section:
- B1 Non-primary production managed investment scheme amount
- U2 Franked distribution related to investments amount
- H1 Other assessable foreign source income from a financial investment amount.
These new labels will support the calculation of the beneficiary’s Net financial investment loss at IT5 in their tax return. You previously would have needed to supply this information to the beneficiary separately.
Processing improvements
We've also streamlined some of our processes and worked with software providers to validate information provided in the trust tax return for consistency and quality. These changes aim to reduce errors, manual intervention, and delays when we process trust tax returns.
We'll check assessment codes against other details in the statement of distribution to ensure that:
- individual beneficiaries have a date of birth provided
- non-individual beneficiaries do not have a date of birth provided
- the beneficiary date of birth aligns correctly to under-18 and over-18 assessment codes
- a valid date of death is included that aligns to no-beneficiary presently entitled assessment codes 15 or 16.
Your digital service provider will let you know how these changes affect the software you're using, and how to resolve any errors before you can lodge the trust tax return.
We're also reducing the number of scenarios that ask for additional information to be included in, or attached to, the return. We'll provide details in the Trust tax return instructions 2026 that we'll be publishing in late June. We'll let you know when they're available.
TFN reporting for closely held trusts
Prior to making distribution resolutions before 30 June 2026, ensure beneficiaries of closely held trusts have provided their tax file number (TFN) to trustees. This should occur before they receive a payment or entitlement to trust income.
Where a TFN has not been provided, the trustee may be required to withhold at the top rate of tax.
You also need to send us the TFN report for June quarter distributions by 31 July 2026.
To find out more about these obligations, you can read TFN withholding for closely held trusts.
Proposed changes from 1 July 2026
The government has introduced legislation into Parliament to amend how beneficiary TFNs are reported by closely held trusts, when beneficiaries become entitled to trust income.
If enacted, these changes will remove the requirement to lodge a TFN report for distributions made from 1 July 2026. We'll update our website once the law is enacted.
Stay informed of the MTAS changes
We'll continue delivering improvements beyond Tax Time 2026 and into Tax Time 2027. You’ll find more details about these changes on our website at ato.gov.au/MTAS.
We'll continue to update this page as our modernisation program progresses.