This paper looks at drafting resolutions for income and capital gains distributions by discretionary trust trustees following the introduction of the Tax Laws Amendment (2011 Measures No.5) Act 2011 (TLAA5) and pending the proposed “rewrite” of the trust tax provisions due on 1 July 2014. It provides a fairly detailed background history explanation to the introduction of TLAA5, the evolution of modern deeds, the emergence of deeds with income equalisation clauses (culminating in the Bamford decisions) and the impact of the new legislation on both “ordinary concepts” deeds and those deeds which define trust income in various permutuations of “tax” concepts. The effect of Bamford and TLAA5 on streaming of different types of income and capital receipts to different beneficiaries (in particular, franked distributions and capital gains) is discussed. The paper stresses the fact that there can be no “one size fits all” resolution for all trusts at year-end and identifies a number of different types of trust deed which require different types of year-end resolutions. Exmple resolutions for some of the more common types of deed which are provided.
Read full “Trustee Resolutions” paper by Tony Riordan