As we approach the end of the financial year in Australia, one task stands out for anyone using a trust structure: signing your Trust Distribution Resolution. This document determines how income is allocated from the trust - and if it’s not signed by 30 June, the ATO can tax the entire profit at the top marginal rate (up to 47%).
That’s a steep penalty for missing paperwork.
Here’s what you need to know to stay compliant and protect your tax position.
What Is a Trust Distribution Resolution in Australia?
A trust distribution resolution is a legal document that outlines who will receive income from a trust for the financial year. It must be signed before 30 June.
Even if your distributions stay the same each year, the ATO won’t honour them without a signed resolution. This applies regardless of whether income goes to family members, companies, or other entities.
If your structure includes a trust, this is one of the most important EOFY steps to get right.
What If You Miss the Trust Distribution Resolution Deadline?
Miss the deadline, and the ATO can tax all of the trust’s income in the hands of the trustee. That income may be taxed at the highest marginal rate…up to 47%.
This defeats the purpose of using a trust for tax planning and flexibility. You lose the benefits and end up paying more tax than necessary.
So…it’s simple…don’t miss the deadline.
Can You Sign the Resolution Without Final Figures?
Yes. You don’t need final numbers to sign your trust distribution resolution in Australia.
Accountants can prepare the document using reasonable estimates. These can be based on your year-to-date figures or forecasts. You’ll finalise the exact distributions when preparing your tax return – but the resolution itself must be signed before 30 June.
Waiting for final numbers is a common mistake. And it often leads to costly tax outcomes.
What Should You Do Now?
If you’re unsure whether this applies to your structure, ask your accountant as soon as possible. Or check the ATO’s guidance on trust distributions.
📬 Our Inline Partners clients will receive personalised instructions by email over the coming weeks. Watch your inbox for next steps.
Final Thoughts
A signed trust distribution resolution in Australia is essential if you want to:
Avoid the top tax rate on trust income
Distribute income to family members or entities as planned
Stay compliant with ATO rules
It’s a quick task that can save you a lot – but only if it’s done before 30 June.
Need help or want to be sure it’s sorted?
👉 Book a quick chat with our team. We’ll make sure your resolution is signed, submitted, and stress-free.
