Trust Distribution
Income distributed from a trust to its beneficiaries, who include it in their own tax returns at their individual tax rates.
A trust distribution is the allocation of income, capital gains, or franked dividends from a trust to its beneficiaries. In Australia, trusts themselves generally don't pay tax (except for any income not distributed to beneficiaries, which is taxed at the top marginal rate of 45%). Instead, beneficiaries include their share of the trust's distributable income in their own tax returns and pay tax at their individual rates.
Trust distributions can include various components: ordinary income (interest, rent, dividends), franked dividends (with franking credits passed through to beneficiaries), capital gains (which can retain their character, including the 50% CGT discount if applicable), and tax-free amounts. The trustee determines how income is distributed among beneficiaries, which can allow some flexibility in tax planning by directing income to beneficiaries in lower tax brackets.
For managed investment trusts and property trusts, distributions are typically received quarterly or semi-annually, with a tax statement (known as an AMMA statement for AMITs) provided at year-end detailing the tax components. Beneficiaries must include their trust distribution in their tax return regardless of whether they actually receive the cash — for example, in a discretionary trust, the trustee may distribute income to you on paper but retain the cash in the trust for business purposes.
Calculate it yourself
Open calculator →Related Terms
Franking Credits (Imputation Credits)
Tax credits attached to dividends representing company tax already paid on the profits, preventing double taxation.
Capital Gains Tax (CGT)
Tax on the profit made from selling or disposing of an asset, such as property, shares, or cryptocurrency.
Managed Fund Distribution
Income distributed to unit holders of a managed investment fund, which may include dividends, interest, capital gains, and tax credits.
ETF Distribution
Income distributed by an exchange-traded fund (ETF) to its unit holders, with tax components similar to managed fund distributions.
Income Tax
Tax levied by the federal government on your taxable income, calculated using progressive tax brackets.