What happens if I miss the 30 June deadline for an Australian trust?

If no valid distribution resolution is made by 30 June, all trust income becomes "non-presently-entitled" income. Under section 99A of the ITAA 1997, the ATO will assess the trustee on this income at the top marginal rate (47% including Medicare levy). The ATO will not accept resolutions dated after 30 June as creating present entitlement for the year that has already closed.

Can I distribute different amounts to different beneficiaries each year?

Yes. A discretionary trust allows the trustee to distribute income in any proportions permitted by the trust deed, and to different beneficiaries in different years. The distribution minute records the trustee's exercise of this discretion. There is no requirement to distribute equally or consistently, provided the beneficiaries are within the class defined in the trust deed.

Does the trust distribution minute need to be witnessed?

A trust distribution minute does not require independent witnesses under Australian law — it is a trustee resolution, not a deed. The trustee (or authorised company officer if using a corporate trustee) signs the minute as evidence of the resolution. Some accountants and solicitors recommend countersigning for evidentiary purposes, but it is not legally required.

Who can be a beneficiary of an Australian discretionary trust?

Beneficiaries must be within the class defined in the trust deed (typically the deed lists named individuals and a range of related parties, companies, and trusts). The trustee can only distribute to beneficiaries within this class. Distributing outside the class creates a "default beneficiary" situation or may void the distribution. The distribution minute should recite the beneficiaries as being within the trust's beneficiary class.

What is CGT streaming and do I need it?

CGT streaming is the process of specifically allocating a capital gain made by the Australian trust to a particular beneficiary who can best use the 50% CGT discount (for example, an individual rather than a company). Streaming is optional but can significantly reduce the tax payable on capital gains. It requires the Expert section of this template and must be done in writing before 30 June under Division 102 of the ITAA 1997.

Does this template work for SMSFs or unit trusts?

This template is designed for Australian discretionary (family) trusts where the trustee has discretion over income distribution. SMSFs have specific allocation rules under the SISA and are not discretionary trusts. Unit trusts distribute income in proportion to unit holdings and typically do not require a discretionary distribution minute — unit distributions are governed by the trust deed and the unit register.

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Trust Distribution Minute Template

A trust distribution minute is the formal trustee resolution that determines which beneficiaries are presently entitled to trust income for an Australian financial year. It must be made on or before 30 June each year to comply with section 97 of the Income Tax Assessment Act 1997 (Cth) and avoid the ATO taxing all undistributed income at the top marginal rate.

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TRUSTEE INCOME DISTRIBUTION MINUTE

Mitchell Family Trust · Financial Year 1 July 2025 To 30 June 2026

MINUTE DETAILS

TRUST NAME	Mitchell Family Trust
TRUSTEE	Mitchell Trustee Pty Ltd
FINANCIAL YEAR	1 July 2025 to 30 June 2026
RESOLUTION DATE	20 June 2026
BENEFICIARIES	3

Trust: Mitchell Family Trust

Year: 1 July 2025 to 30 June 2026 · Resolved: 20 June 2026

MINUTES OF A MEETING OF THE TRUSTEE of the Mitchell Family Trust held on 20 June 2026. Present: Mitchell Trustee Pty Ltd of 22 Macquarie Street, Sydney NSW 2000, being the Trustee of the Trust. The Trustee noted that for the financial year 1 July 2025 to 30 June 2026, the net income of the Trust (within the meaning of section 95 of the Income Tax Assessment Act 1936 (Cth)) must be resolved upon on or before 30 June to avoid the Trustee being assessed at the top marginal rate under section 99 of that Act.

TRUSTEE RESOLUTION — INCOME DISTRIBUTION

IT WAS RESOLVED THAT the Trustee, in exercise of its absolute discretion under the Trust Deed, hereby resolves to distribute the net income of the Mitchell Family Trust for the financial year ended 1 July 2025 to 30 June 2026 to the following beneficiaries in the following proportions or amounts: James T. Mitchell — 40%; Susan A. Mitchell — 40%; Mitchell Holdings Pty Ltd — 20%. This resolution is made on or before 30 June of the financial year in accordance with the Trust Deed and section 97 of the Income Tax Assessment Act 1936 (Cth). Each beneficiary named above is presently entitled to their allocated share of the net income of the Trust as of the date of this resolution.

NATURE OF ENTITLEMENT

The Trustee confirms that: (a) each beneficiary named in this resolution is a beneficiary of the Trust within the meaning of the Trust Deed; (b) each beneficiary has a present entitlement to their allocated share, meaning the beneficiary has an indefeasible right to demand payment — the Trustee is in a position to meet the entitlement; (c) amounts to which beneficiaries are entitled are available for distribution or, if not immediately paid, are held by the Trustee as a debt due to the beneficiary from the date of this resolution; (d) all entitlements shall be held on bare trust for the relevant beneficiary until paid or otherwise dealt with as the beneficiary directs; and (e) the Trustee shall procure payment or account of each entitlement in accordance with each beneficiary's instructions and the Trust Deed. If the net income differs from the distributed amount due to adjustments in the Trust's accounts, the residual shall vest in accordance with the Trust Deed.

UNPAID PRESENT ENTITLEMENTS

To the extent that any beneficiary's entitlement is not paid in cash on or before the end of the financial year, the Trustee shall record the unpaid amount as an Unpaid Present Entitlement (UPE) on the Trust's balance sheet. The UPE represents a debt of the Trust to the beneficiary. Division 7A considerations (corporate beneficiaries): Where a beneficiary is a private company (including a bucket company), the Trustee acknowledges that a UPE owing to a corporate beneficiary may constitute a deemed dividend under Division 7A of the Income Tax Assessment Act 1936 (Cth) unless the UPE is placed on complying sub-trust or placed on loan terms satisfying the Division 7A benchmark interest rate and repayment schedule. The Trustee and corporate beneficiary are directed to seek tax advice on the UPE treatment. This clause is a reminder only and does not constitute tax advice.

RECORD KEEPING AND ACCOUNTS

The Trustee shall: (a) record this minute in the Trust's minute book within thirty (30) days of the date of this resolution; (b) ensure that the Trust's financial accounts for the financial year reflect the distribution entitlements resolved herein; (c) provide each individual beneficiary with a statement of their distribution entitlement promptly after the end of the financial year; (d) procure preparation of the Trust's annual tax return (Trust Tax Return) disclosing all beneficiary entitlements in accordance with this resolution; and (e) retain this minute and all supporting records for at least five (5) years. The Trustee acknowledges that failure to make a valid distribution resolution before 30 June may result in the Trustee being assessed on the entire net income of the Trust at the top marginal income tax rate under section 99 of the Income Tax Assessment Act 1936 (Cth).

CAPITAL GAINS STREAMING RESOLUTION

IT WAS FURTHER RESOLVED THAT pursuant to Subdivision 115-C of the Income Tax Assessment Act 1997 (Cth) and the Trust Deed, the Trustee hereby specifically allocates and streams the Trust's capital gains for the financial year 1 July 2025 to 30 June 2026 to the following beneficiary: Mitchell Holdings Pty Ltd. Capital gain details: Capital gain on disposal of ASX-listed shares (discount method applied, 50% CGT discount — net capital gain $25,000).. This streaming election is made so that the designated beneficiary, and not other beneficiaries, will be assessed on the relevant capital gain(s). The Trustee confirms: (a) the streaming election is consistent with the Trust Deed and the beneficiary's entitlement; (b) the designated beneficiary has been notified of this election; (c) the amount of capital gain streamed to the beneficiary will be reflected in the Trust's income tax return and AMMA (Annual Trustee Tax Return). Note: A valid streaming election requires a clear nexus between the streamed amount and a specific beneficiary — general statements without a specific election may not be effective. The Trustee is directed to obtain tax advice to confirm streaming eligibility.

FRANKED DISTRIBUTION STREAMING RESOLUTION

IT WAS FURTHER RESOLVED THAT pursuant to Subdivision 207-B of the Income Tax Assessment Act 1997 (Cth) and the Trust Deed, the Trustee hereby specifically allocates and streams the Trust's franked distributions (including associated franking credits) for the financial year 1 July 2025 to 30 June 2026 to the following beneficiary: James T. Mitchell. Distribution details: Franked dividend of $14,000 received from BHP Group Ltd, franking credits $6,000.. This streaming election directs the franked dividend income and attached franking credits to the designated beneficiary so that beneficiary may utilise the franking credit offset against their tax liability. The Trustee confirms: (a) the beneficiary is a resident of Australia (non-residents cannot use franking credits); (b) the Trust has received a franked distribution from a corporate tax entity; (c) the election has been made before the end of the financial year. The designated beneficiary will be assessed on the grossed-up amount of the distribution and is entitled to the franking credit offset. This streaming election must be recorded in the Trust's annual income tax return.

COMPLIANCE DECLARATIONS

The Trustee makes the following compliance declarations in connection with this resolution: (a) Complete income resolution: The Trustee confirms that all net income of the Trust for the financial year has been resolved upon by this minute and no trust income remains undistributed; (b) Section 97 acknowledgment: The Trustee acknowledges that this resolution creates present entitlements in each beneficiary under section 97 of the ITAA 1936, and each beneficiary will be assessed on their share of net trust income; (c) Prior year entitlements: The Trustee confirms that all prior financial year income entitlements have been fully discharged or properly recorded as UPEs; (d) This resolution is made in good faith by the Trustee in the honest exercise of its discretion, consistent with the Trust Deed and applicable law. No conflict of interest has prevented the Trustee from making a fair and impartial distribution.

TRUSTEE

Mitchell Trustee Pty Ltd

Date: ____________________

What Is a Trust Distribution Minute?

A trust distribution minute (also called an income distribution resolution or trustee resolution) is a written record of the decision made by the trustee of an Australian discretionary trust about how trust income is to be distributed to beneficiaries for the relevant financial year. Under section 97 of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997), a beneficiary is assessed on trust income only if they are "presently entitled" to that income before the end of the income year (30 June). The distribution minute is the legal document that creates that present entitlement.

If no valid distribution minute is made by 30 June, all trust income may be assessed against the trustee at the highest marginal tax rate under section 99A of the ITAA 1997 — currently 47% including the Medicare levy. The ATO has also issued guidance (including Tax Ruling TR 2012/D1 and ATO guidance on section 100A) targeting distributions that lack genuine commercial reasons, particularly distributions to low-tax beneficiaries who return the benefit to high-income controllers.

Australian discretionary trusts (family trusts) are the most common structure using distribution minutes, but the requirement extends to any Australian trust where the trustee has discretion over income. A distribution minute should record the trust name, the financial year, the resolution date, the names of each beneficiary made presently entitled, and the amount or percentage of income allocated. The Expert version of this template adds capital gains streaming under Division 102 ITAA 1997 and franked distribution streaming under Division 207.

What's Covered in This Template

Our trust distribution minute covers all elements needed to create valid present entitlements for Australian trust income.

Trust Name & Trustee Details

Full trust name, trustee name, trustee address, and governing state of the Australian trust.

Financial Year Period

The Australian income year covered by the resolution (e.g. 1 July 2025 to 30 June 2026).

Resolution Date

Date the trustee passes the resolution — must be on or before 30 June to be effective for that income year.

Beneficiary Entitlements

Names of beneficiaries made presently entitled and their allocated share (percentage or dollar amount).

Trustee's Discretion Exercise

Formal resolution language confirming the trustee has exercised its discretion under the trust deed.

Section 97 Compliance Statement

Acknowledgement that present entitlement is created in accordance with ITAA 1997 section 97.

Expert: CGT Streaming

Resolution to stream capital gains to nominated beneficiaries under ITAA 1997 Division 102.

Expert: Franked Distributions

Resolution to stream franked distributions and attached franking credits under Division 207 ITAA 1997.

Expert: Compliance Declarations

Trustee declarations that all income has been resolved, section 97 is satisfied, and no prior year issues remain.

Trustee Signature Block

Execution by trustee (individual or authorised company officer) as required for a valid Australian trustee resolution.

How to Create a Trust Distribution Minute

Follow these steps to prepare a valid Australian trust income distribution resolution before 30 June.

1
Confirm the Trust and Financial Year
Enter the exact name of the Australian trust as it appears in the trust deed, the trustee name, and the income year (e.g. 1 July 2025 to 30 June 2026).
2
Set the Resolution Date
Choose a date on or before 30 June of the relevant income year. The resolution must be signed by this date — it cannot be backdated after 30 June.
3
Allocate Income to Beneficiaries
List each beneficiary to receive income and assign their entitlement as a percentage or dollar amount. Ensure allocations total 100% of distributable income.
4
Add Expert Streaming (Optional)
Use the Expert section to stream capital gains or franked distributions to specific beneficiaries — useful for maximising tax efficiency under Australian tax law.
5
Sign and Retain
The trustee (or authorised company officer) signs the minute. File the signed original in the trust's minute book. This document must be available for inspection by the ATO and the trust's accountant.

Legal Considerations

Missing or invalid Australian trust distribution resolutions can result in the ATO taxing all trust income at the top marginal rate.

This template is for informational purposes only and does not constitute legal or tax advice. Australian trust distribution law — particularly sections 97, 99A, and 100A of the ITAA 1997 — is complex and subject to active ATO enforcement. Seek advice from a registered tax agent or solicitor.

Reviewed for Australian law

The 30 June Deadline

Under section 97 of the ITAA 1997, a beneficiary must be "presently entitled" to trust income before the end of the income year (30 June) to be assessed on that income. A trustee resolution made after 30 June cannot create present entitlement for the year already ended. The ATO will then assess the undistributed income against the trustee at 47% under section 99A. The ATO's position is that the 30 June deadline is absolute — no extension applies to trust distribution resolutions.

Section 100A Risk

Section 100A of the ITAA 1936 allows the ATO to disregard a beneficiary's present entitlement where it arose under an arrangement that is not a "ordinary family or commercial dealing" and results in someone other than the beneficiary obtaining a benefit from the entitlement. The ATO has increasingly applied section 100A to distributions to low-tax beneficiaries (such as adult children in lower income brackets) where the economic benefit flows back to the controlling trustee. ATO Practical Compliance Guideline PCG 2022/2 provides a risk framework.

Capital Gains Streaming

Under Division 102 of the ITAA 1997 (introduced by the Tax Laws Amendment (2011 Measures No. 5) Act 2011 (Cth)), a trustee can "stream" a capital gain to a specific beneficiary who is made specifically entitled to that gain in the distribution minute. This allows the trust to direct a discountable capital gain to a beneficiary who can most effectively use the 50% CGT discount. The distribution minute must identify the specific capital gain and the nominated beneficiary before 30 June.

Franked Distribution Streaming

Under Division 207 of the ITAA 1997, a trustee can stream franked distributions (dividends with attached franking credits) to specific beneficiaries who are made "specifically entitled". Streaming franking credits to a beneficiary who can use them (e.g. a taxpayer with Australian tax liability) avoids wasting credits. The streaming resolution must be documented in the distribution minute before 30 June. The trust deed must also permit streaming — not all trust deeds include this power.

Frequently Asked Questions

Prepare Your Trust Distribution Minute Before 30 June

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