Streaming Trust Distributions

Dated: June 2011

After the Bamford case, the ATO has begun focusing on the ability of trusts to allocate certain profits to specific beneficiaries (known as ‘streaming distributions’).

New legislative provisions have been introduced to deal with streaming. These take effect from 1 July 2010, so it is particularly important to be aware of their impact when preparing the 2010/11 financial statements and tax returns for discretionary trusts.

The ATO is also currently reviewing its position. Although they have provided guidance in the past (in the form of public rulings) changes to their current position are anticipated.

In order to comply with the new rules, it will be necessary to review the trust deed and complete certain other requirements before 30 June 2011.