Trust Distribution Minutes: What They Are and Why You Can’t Ignore Them (Especially in Australia)

Trust distribution minutes are a must for Australian family trusts. Miss them, and you could pay 47% tax. Here’s what they are, why they matter, and how to get them right before 30 June.

If you’ve got a family trust or discretionary trust in Australia, let’s talk about something that might sound boring—but could seriously mess with your tax: trust distribution minutes.

Every year before 30 June, trustees need to make a formal decision about who gets what income from the trust. That decision needs to be written down in the form of trust distribution minutes—and if it’s not done on time or properly?

Well, the ATO could hit you with a 47% tax rate. No kidding.

Let’s break this down in simple terms:

• What are trust distribution minutes
• Why do they matter
• What’s involved
• What happens if you miss it
• Why it’s 100% worth working with your accountant
• What we’ll do for you

What are trust distribution minutes?

If you’re the trustee of a discretionary or family trust, you get to decide who receives the income from the trust each year.

That decision needs to be made and documented before 30 June. That documentation? It’s called a trust distribution resolution or trust distribution minutes.

It’s basically your official note saying:

“Hey, this year we’re giving 40% of the trust income to Person A, 30% to Person B, and 30% to our company.”

If you don’t write that down and sign it before 30 June? The ATO says, “Cool, we’ll just tax the whole lot at the top marginal tax rate.”

That’s 47 cents in the dollar. Not ideal.

Why trust distribution minutes are a big deal

Here’s why you can’t ignore them:

1. It’s an ATO requirement

The ATO expects distribution decisions to be locked in before the end of the financial year. Late? Doesn’t count. Doesn’t match your trust deed? Doesn’t count.

2. It’s your tax strategy in action

The whole point of a trust is to give you flexibility with how you split income. If you don’t document it, you lose that flexibility—and that can get expensive, fast.

3. Every trust is different

Your trust deed sets out rules around who can receive income and how. Your distribution minutes need to line up with those rules.

What needs to be done to get this right?

It’s not just a tick-box task. Here’s what’s actually involved:

• Reviewing your trust deed (are there restrictions? special clauses?)
• Estimating this year’s trust income—properly, not just guessing
• Considering each beneficiary’s tax situation
• Running tax scenarios to minimise your family group’s tax
• Drafting a compliant resolution that matches your deed
• Getting it signed before 30 June
• Keeping it on file in case the ATO ever asks

What happens if you don’t do it?

Let’s be blunt:

• Your trust income could be taxed at 47%
• You lose flexibility and may miss out on better tax outcomes
• You might trigger an ATO review or audit
• It can mess up future trust distributions and lead to legal issues

Here’s a real-world example:

Last year, a client came to us after 30 June—no distribution minutes had been done. Their previous accountant missed it. The income got taxed in the trustee’s hands at the top rate. Over $25,000 in extra tax. We fixed the process for future years, but that year was a write-off.

Why it’s NOT a DIY job

Templates won’t cut it here. You need advice based on your actual numbers and trust deed.

Some things that make it tricky:

• Distribution wording must match your deed
• Beneficiary tax positions must be considered
• The ATO has toughened its stance, especially with Section 100A rules (if you’re distributing to adult kids or not paying them cash, for example)
• You need the numbers to be spot-on—no guesswork

This is one of those things that looks simple but gets messy fast. That’s why it’s best done with your accountant.

What our Trust Distribution Service includes

Here at WakPac, we don’t do “just lodge it” accounting. We handle trust distribution minutes properly, proactively, and with zero last-minute stress.

Here’s what we do for you:

• Review your trust deed
• Advise on the most effective distribution strategy
• Draft custom distribution minutes
• Walk you through everything in plain English
• Get it all signed before 30 June
• Keep you compliant, protected, and tax-smart

Want to avoid the June panic?

June 30 sneaks up fast. So here’s the deal:

‍Contact us by Wednesday, 4 June‍

We’ll sort your trust distributions
You’ll know your tax position ahead of time
And we’ll lock it all in with no stress

No nasty surprises. No DIY disasters. Just solid advice and sharp strategy.

Shoot us a message—we’ll make it easy.