Trust Distribution Minutes Library for 2011/12

What are Distribution Minutes?

Before the end of each financial year you have to work out who gets what income out of your Family Trust or Testamentary Trust. If you don't then you pay a lot of extra tax.

This kit provides you with a range of pro-forma Distribution Minutes that you can use.

To build the pro-forma Distribution Minutes press next. Answer the question.
Read the Summary. Lock & Load. Put in your credit card details and within 14 seconds you have your pro-forma minutes ready to use. You can email them, print them and save them onto your own hard drive. (If you don't want to pay by credit card then send to us a postal order or cheque and when received the document will be released to you).

Do it BEFORE the end of the financial year:

Don’t forget to do “Family Trust Distribution Minutes” before the end of the financial year.

Warn your clients about Div 7A:

Last year the single biggest negligence issue suffered by accountants was over Division 7A. Clients have been unfairly asking “why didn’t my accountant tell me about Div 7A?” It is not the accountant’s job to hold your hand for 365 days of the year.

The old style of minutes don’t work:

Further, the simple days of drafting family trust distributions by allocating $772 to each minor beneficiary, a further amount to a non-working spouse with “the balance to X Pty Ltd” is gone.

There is certainly a risk of extra tax liabilities. Don’t forget that for legal purposes (unless there is something contrary in the Deed) the trust’s net income of a trust is determined under generally accepted accounting practice.

“Accounting net income” is not always “net income” for tax purposes. Think about the effect of capital gains tax indexation, the carry forward of losses, accelerated tax depreciation rates, the “quarantining” of foreign losses, non-deductible provisions, and prepayments.

Does your Trust Deed require the accounting income of the trust to be distributed to beneficiaries? Have a look at Section 97. Your beneficiaries pay their tax on their “share” of the tax law “net income” of the trust. This may be a long way from the cash received.

Section 97 requires the tax law “net income” of the trust to be allocated among beneficiaries in proportion to their entitlement to accounting net income.

Use our minutes to protect the accountant & inform the client:

To protect the Accountant, and so that the client is fully made aware of obligations, we have put together a pro-forma “Family Trust Distribution” minute. The minute and Explanatory Notes make it difficult for a client to argue that their accountant never told them something. You can get your hands on these excellent pro-forma distribution minutes, for both Family Trusts and Testamentary Trusts, from www.lawcentral.com.au.

Pro-forma family trust and testamentary trust “distribution minutes”

1. Explanatory Notes


2. The pro-forma minutes are comprehensive, simple to use and highly protective.
   
   If you purchase one for your Family Trust and it is not what you want, fax it back and we will refund your money, no questions asked.

What do I get with this document?

1. Discretionary Trust Distribution Minutes where there are net capital gains and no franked distributions. These Trust Distribution Minutes assume:
   
   
   
   1. your Trust Deed has an income equalisation clause which equates the income of the trust fund with the net income in section 95 of the Income Tax Assessment Act 1997 and discounted components of a capital gain OR your Trust Deed allows your Trustee to determine that the income of the trust fund includes discounted components of a capital gain.
   
   
   2. has a streaming clause to stream capital gains.
   
   
   3. allows the net financial benefit to be recorded in its character as referable to the capital gain in the records or accounts of the Trust.


2. Discretionary Trust Distribution Minutes where there are franked distributions and no net capital gains. These Trust Distribution Minutes assume:
   
   
   
   1. your Trust Deed has an income equalisation clause which equates the income of the trust fund with the net income in section 95 of the Income Tax Assessment Act 1997 and excludes any franking credit OR your Trust Deed allows your Trustee to determine that the income of the trust fund excludes any franking credit.
   
   
   2. has a streaming clause to stream franked distributions.
   
   
   3. allows the net financial benefit to be recorded in its character as referable to the franked distribution in the records or accounts of the Trust.


3. Discretionary Trust Distribution Minutes where there are no net capital gains or franked distributions. These Trust Distribution Minutes assume your Trust Deed has an income equalisation clause which equates the income of the trust fund with the net income in section 95 of the Income Tax Assessment Act 1997 OR your Trust Deed allows your Trustee to determine that the income of the trust fund includes capital gains.


4. General Distribution on the basis of dollars or a percentage of tax payable.


5. The CGT Exemption Preservation Distribution.


6. The under 18 (not disabled) distribution.


7. The under 18 year old child with a disability resolution.


8. Where the Trustee is to pay the tax for the beneficiary.


9. The withholding tax resolution.


10. Franking and foreign tax credits resolution.


11. Tax Exempt charity WITHOUT income tax deduction status Resolution.


12. Remaining surplus income Resolution.


13. Indefeasible Interest Resolution.


14. Further Explanatory Notes on completing Distribution Minutes.

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Name of Trust
• What is the trust's name? I can't find it.
• What am I buying?
• Minutes also for Testamentary Trusts as well?
• Why are these minutes usable for only one trust?

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Name of Trust

• What is the trust's name? I can't find it.

  Every trust has a name.
  
  Get out the trust deed. The name may be on the cover page, front page or in the last few pages.
  
  The trust name is often named after the person that asked for the trust in the first place. For example, if the accountant set up a trust for Mr. Smith then the trust is perhaps called the "Smith Family Trust".
  
  If the trust is a Testamentary Trust then the trust is often called after the dead person or the main beneficiary. E.g. "Smith Testamentary Trust".
  
  There is no magic to the trust's name. We even had one client, who out of spite to the Australian Taxation Office called his trust the "McScrooge Family Trust".

  This hint is provided by Law Central Legal.

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• What am I buying?

  You are purchasing 2 things:
  
  1. Draft minutes that will help you prepare up fully ATO compliant distribution minutes for your family trust, discretionary trust or testamentary trust. Another name for these draft minutes would be "pro-forma" minutes. These are for you to copy and use.
  
  2. You also get Explanatory Notes throughout the these pro-forma minutes.

  This hint is provided by Law Central Legal.

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• Minutes also for Testamentary Trusts as well?

  Yes, that is correct.
  
  The pro-forma minutes are needed for family trusts, any type of discretionary trusts and testamentary trusts.
  
  A testamentary trust is a trust that is created in someone's Will. A Will only starts when someone dies. Therefore, the testamentary trust only starts when that person dies.

  This hint is provided by Law Central Legal.

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• Why are these minutes usable for only one trust?

  Each pro-forma minute is usable for only one trust. They are priced at a very low amount to reflect that.
  
  You can't use the pro-forma minute for other trusts.
  
  If you break the law and breach copyright then you would lose the law firm's professional indemnity insurance that is provided on each pro-forma minute that you purchase for the single trust.
  
  Also, if you were caught you could be reprimanded by your professional body for breaking the law.
  
  For the few dollars to build the minutes: is it really worth the risk, the loss of PI protection and public humiliation?

  This hint is provided by Law Central Legal.

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This document has been prepared by Law Central Legal.

Liability limited by a scheme approved under Professional Standards Legislation