Trust resolutions — why timing and documentation matter
Trust distributions can be a legitimate planning tool — but only if the trustee makes the decision by the deadline and documents it properly. A recent Tribunal decision is a reminder that “we intended to” doesn’t carry much weight if the paperwork doesn’t back it up.
The issue: late or undocumented resolutions
In Goldenville Family Trust v Commissioner of Taxation [2025], the trustee attempted to distribute trust income to a non-resident. The Tribunal found the distribution resolutions invalid because they weren’t properly documented by 30 June.
Even where documents were signed and dated “30 June”, the Tribunal concluded they were likely prepared months later once the financials were ready. The result was a nasty one: the income was taxed to default resident beneficiaries at higher rates.
Why this matters (in plain English)
Trust planning relies on two things: the decision being made on time, and evidence that it was made on time. If either is missing, the tax outcome can flip — and it often flips in the most expensive direction.
Similar risks: Division 7A and loan set-offs
The same theme shows up when people use loan set-offs involving dividends. Where timing and agreement aren’t properly evidenced, the ATO can treat it as not having happened in the way you thought — which can trigger a deemed unfranked dividend outcome under Division 7A.
Practical takeaway
- Make real distribution decisions by the deadline — not months later.
- Capture contemporaneous evidence (minutes, trustee resolutions, emails).
- Finalise paperwork early so it reflects what actually happened.
In a nutshell
An SMSF can make sense when your balance, strategy, and willingness to manage responsibilities all line up. If you want, we can help you compare an SMSF to staying in an APRA fund and sense-check whether it’s worth it.
General information only — not advice. Trust deeds differ and outcomes depend on your circumstances.
If you would like to discuss any of the above further, please don’t hesitate to contact our office.