Trustees: July 31 deadline for new beneficiaries to provide TFNs
Closely held and family trust beneficiaries are reminded that they must quote their tax file numbers (TFNs) to trustees before July 31. Otherwise, the trustee is obliged to withhold tax at the top marginal rate, plus Medicare, from any payments distributed to you. A trustee failing to do so can also have penalties applied.
In particular, the trustee must lodge a “TFN report” to the ATO by July 31, disclosing new beneficiaries to whom distributions are to be made to.
An “Annual trustee payment report” containing details of all payments made to beneficiaries for the year is also required. This is done by completing relevant information in the trust tax return.
The ATO uses this information to determine whether taxpayers have correctly disclosed trust income in their own tax returns.
So, if you’re a trustee of a trust which is distributing to new beneficiaries in the 2012-13 income tax year, make sure you contact our office. We can assist you in lodging a TFN report (if necessary) so that you pass on the relevant TFNs to the ATO.