Further update on Annual Trustee Payment report

Written by Webb Martin Consulting on Thursday the 4th of August, 2011

We have had  a number of queries in response to our previous  ‘Assessment’ in relation to the Annual Trustee Payment report requirements and in particular the interaction with Label ‘S‘ in the beneficiary Statement of Distribution section of the 2011 trust income tax return.

The legislative provisions require trustees to report annually, in the ‘approved form’ details of payments made to beneficiaries, even if there was no withholding because the beneficiary quoted their TFN to the trustee by the requisite time.

A payment, for this purpose, is defined to be:

- a distribution during the year from the ordinary or statutory income of the trust;

- if the beneficiary is presently entitled at the end of the income year to a share of the income of the trust – that share of the net income the trust.

Label ‘S‘ in the beneficiary Statement of Distribution section appears to require payments to beneficiaries made during the year to be reported twice.

However, the ATO 2011 trust tax return instructions confirms reporting such payments twice is not required where the payment is reported at another label. The following extract confirms this:

Annual trustee payment report information

 

This section is to be completed by all closely held trusts (including family trusts) which are subject to the TFN withholding rules for closely held trusts that have:

 

  • made payments during the income year that are not reported elsewhere on the statement of distribution, or
  • withheld amounts from payments made to beneficiaries.

Show at S the distributions from ordinary or statutory income that were made to the beneficiary during the income year that were not included elsewhere in the statement of distribution. You are required to report these amounts, even if the beneficiary has quoted their TFN and the trustee did not have a withholding obligation.

Some of the information required by the legislative provisions may already be included at other labels in the statement of distribution in the trust tax return. Accordingly, when completing label S, only those amounts which constitute a ‘payment’ that have not already been reported elsewhere in the distribution statement should be reported at label S.

The above instructions outline the Commissioners ‘approved form’ requirements for the 2011 Annual Trustee Payment report and clarify that Label ‘S’ is essentially a residuary label for payments that have not already been included in the Statement of Distribution.

Any specific enquiries relating to this article can be directed to Rob Power on 03 8662 3200 or robp@webbmartinconsulting.com.au

Disclaimer

‘The Assessment’ is intended to provide general information or comments on the particular topic. The content is not intended to exhaustively deal with all issues relating to that topic. As the content is general in nature, they are not to be used, relied or acted upon without seeking further professional advice. Webb Martin Consulting accepts no liability for any errors or omissions, or for any loss or damage suffered as a result of any person acting without such advice.

 

Leave a Reply

 

Tags