ATO introduces trust taxation changes

The Australian Taxation Office (ATO) has announced income tax reporting changes under the Modernisation of Trust Administration Systems (MTAS) that will come into effect on July 1.

For beneficiaries of a trust, there will be a new trust income schedule available from the start of the new financial year.

"This is a new form that you lodge with your tax return. We've replicated fields from the statement of distribution, so all you need to do is copy the information across," the ATO said.

"Remember, you'll need to get the information required in the trust income schedule from the trust. We recommend that you ask the trustee for a copy of the trust statement of distribution."

The ATO said beneficiaries who receive a distribution of trust income from a managed fund should also include that in the new trust income schedule.

"The trust income schedule instructions will show you how the information on the tax statement provided by the managed fund is reported on the trust income schedule," the ATO said.

In addition to beneficiaries, small business owners who are trustees will also see changes when submitting their tax return.

The ATO will add four capital gains tax (CGT) labels into the trust tax return statement of distribution.

"The information contained in the statement of distribution section of your trust tax return will provide beneficiaries everything they need to complete their trust income reporting obligations," the ATO said.

"We recommend giving this information to beneficiaries to help them with their obligations."