The ATO is currently reviewing adherence to certain trustee obligations, including the lodgement of Tax File Number (‘TFN’) reports for TFN withholding for closely held trusts.
Beneficiaries are required to quote their TFN to trustees to avoid having tax withheld from payments or unpaid present entitlements, and trustees must lodge a TFN report for any quarter in which a beneficiary quotes their TFN to the trustee.
If beneficiaries have not quoted their TFN to the trustee, the trustee must:
• withhold tax at the rate of 47% from the distribution;
• pay this tax to the ATO; and
• report, in an annual report, details of all withheld amounts.
* * * Disclaimer: The information is sourced from NTAA. * * *
Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their circumstances.