ATO Vigilant On TFN Reporting

Posted on Oct 14, 2012 | 0 comments

The ATO has advised that it will review the 2011 Trust Tax Return ‘distribution statements’ to identify where a beneficiary has received a distribution and not quoted a TFN.

Logically, it would seem that the ATO is about to embark on an audit campaign, targeting trusts and strictly applying the TFN withholding rules.

A trustee is generally required to withhold 46.5% in tax from distributions where beneficiaries fail to provide their TFN.  If the trustee does not withhold tax, it can face fines or penalties.

The simple message is that all trustees should ensure they have beneficiaries’ TFNs before making distributions.

Compliance action

Trustees will be selected by the ATO based on considerations such as:

  • size of distribution; and
  • whether the beneficiary appears to have returned the distribution as income.

The letter forwarded to trustees will:

  • explain the measures;
  • provide the ATO’s understanding of the facts;
  • ask the trustee to confirm whether the ATO’s understanding is correct; and
  • explain to the trustee how they can rectify the situation going forward, noting there may be penalties/remission.
If you require any more information on Trust Distributions, call the office on 07 5585 8555 or email Joe at

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