The ATO has issued a reminder to SMSF trustees with regard to the change in reporting requirements with which they will have to comply if the fund holds units in a trust and is a beneficiary of that vehicle.
The amendment to the reporting obligations take effect from 1 July 2024 and have been introduced as part of the Modernisation of Trust Administration System (MTAS) project. Trustees will need to be conscious of it when lodging their SMSF annual return (SAR) for the 2024/25 income year.
“If your SMSF has received a distribution from a trust you need to complete a new trust income schedule which is lodged with your SAR. We’ve replicated the fields from the trust statement of distribution, so all you need to do is copy the information across,” the regulator stated in a release.
The ATO noted the new reporting regime will apply to income from managed funds as well.
“If you receive a distribution of trust income from a managed fund, this should also be included 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,” it advised.
Further the announcement also directed trustees as to the information they will need to comply with the new arrangement and where to source it.
“Remember you will need to get the information required in the trust income schedule from the trust. We recommend you ask the trustee for a copy of the trust statement of distribution if you don’t receive one by the time you come to lodge your SAR,” it said.
The MTAS project was announced in the March 2022 federal budget. Its specified aims are to streamline the taxpayer lodgement experience, improve the quality, accuracy and integrity of annual income tax return information reported by trustees and beneficiaries, and allow the ATO’s compliance arm to be better informed.
