2020 Trustee Resolutions

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Trustees are required to have made their 2020 resolutions to distribute trust income on or before 30 June 2020, subject to their respective Trust Deed. It is recommended that the resolution is made in writing and is in a format that is compatible with the respective Trust Deed.

A written record will provide better evidence of the resolution and avoid a later dispute with the ATO as to whether any distribution of income was effectively made by 30 June.

If the resolution is not made and signed by 30 June, the ATO may assess the trust income to the trustee at 45%.

To assist you in starting the process with your clients, we have made available a template letter to contact clients explaining the requirement here. This presents a great opportunity for you to review your clients’ 2020 income year in real time, implement tax planning strategies and effectively draft a Trust Resolution that gives your clients the most tax effective outcome.

To assist you in preparing the trustee resolutions for your client, we have updated our four trustee resolution templates for your purchase of $250 (plus GST). To purchase and download the 2020 Trustee Resolutions Template, simply visit our website and log in to the MKT Resources located in the menu bar of our website. It is important that you ensure that each resolution is prepared strictly in accordance with the Deed, so the template is designed to be tailored by you for each trustee.

If you have any problems with downloading the Resolutions, please contact Kim Ly at our office, or if you require our assistance in tailoring the resolution, contact Peter Hong or Gaurav Chitnis.

Tax and Trust Law Review of Trust Deed

Of course, the first step in the process is to ensure that your clients’ Trust Deed enables you to make the distributions you wish and in that regard we have partnered with Irdi Legal to review your Deed;

  • Firstly, MKT will ensure it meets the tax law requirements to make an effective distribution and provide you with a memorandum highlighting our review findings; and
  • Secondly, Irdi Legal will undertake a high-level review of the Trust Deed and any variations thereto and provide a letter of advice outlining their findings.

Where no variation is required, all that is required by you is to then determine and insert the actual distributions of trust income, capital or streamed capital gains and franked dividends for each beneficiary, as instructed by the Trustee, on or before 30 June 2020.

Where a variation is required, Irdi Legal will provide a fixed quote to undertake that variation prior to 30 June 2020.

MKT has arranged a fixed fee of $750 (GST inclusive) for MKT Accountants Network firms to have MKT & Irdi Legal undertake the Trust Deed Tax & Trust Law review.

If you would like MKT & Irdi legal to Review the Deeds of any of your Trust clients, please forward a copy of the Deed, together with all amendments and variations to Gaurav Chitnis of this office.  If you have any queries or require any assistance with reviewing Trust Deeds or preparing 2020 Trust Resolutions please contact Gaurav Chitnis, Peter Hong or Sean Pearce.

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