Documentation, Regulation, SMSF, Trusts

New trust reporting requirements for SMSFs

MTAS Modernisation of Trust Administration Systems SMSF Self-managed superannuation Trusts Capital gains SMSF Association ATO

New ATO reporting rules for SMSFs receiving trust distributions are now in effect, impacting lodgements for the 2024 income year onwards.

SMSF trustees holding units in a trust and receiving distributions are now required to comply with updated reporting requirements when the fund lodges its annual return.

SMSF Association head of advocacy and policy Tracey Scotchbrook highlighted these changes, part of the ATO’s Modernisation of Trust Administration Systems strategy, take effect from 1 July and apply to lodgements for the 2024 income year onwards.

“This is a project the ATO has been working on over the course of the last 12 months and it will impact the 2024 income year returns for SMSFs who are receiving distributions from trusts. This includes exchange-traded funds, managed funds, stapled securities and related trusts as well,” Scotchbrook noted during a webinar held by the association last week.

“SMSFs must complete and attach a schedule to the SMSF annual return. This schedule replicates fields from the trust statement of distribution and the new schedule includes information such as gross capital gains, capital losses that have been applied, capital gains tax (CGT) discounts and small business tax concessions.

“SMSFs will need to report their trust income accurately, they need to use the new schedule and it needs to align with the information that’s actually provided in the trust statement of distribution.

“This change will be important, ensuring that there is consistency and clarity in reporting. There will be new data validation in the trust tax return and this will enhance the integrity of the reported data and support better compliance activities by the ATO.”

From 1 July, trustees will notice changes to the labels in the statement of distribution section of their trust tax return. These changes include the addition of four CGT labels that will help in notifying beneficiaries of their income entitlements and support accurate CGT calculations in their tax returns.

The regulator recently released the trust income schedule for 2024 and practitioners and trustees can find instructions for completing and attaching it to the SMSF annual return on the ATO’s website.

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