As we head towards the end of the financial year one conversation we have with a lot of clients is about trust distribution minutes.
It’s probably not the most exciting EOFY task on the list, but it is an important one – especially for anyone with a discretionary trust.
Each we see the same thing happen. June arrives quickly, business gets busy and trust distributions become something people assume can simply be sorted out later alongside the tax return.
In most cases, they can’t.
What is a trust distribution minute?
If you have a discretionary trust, the trustee generally needs to decide how the trust income will be distributed before 30 June each year.
A trust distribution minute simply records that decision. It confirms who will receive the trust income, how much each beneficiary will receive and that the trustee made the decision before the end of the financial year.
While it sounds fairly administrative, it plays an important role in how the trust income is taxed.
Why timing matters
One of the biggest misconceptions around discretionary trusts is that trustees can make distribution decisions after the financial year ends when the accountant prepares the tax return.
Unfortunately, it doesn’t really work that way.
Once 30 June passes, trustees generally lose the opportunity to change those distribution decisions. That’s why EOFY trust planning is something we encourage clients to think about earlier, rather than leaving until the last week of June when everything starts to feel rushed.
Having these conversations before year end gives everyone more time to properly review things and make informed decisions rather than trying to scramble through it at the last minute.
That might include:
- reviewing estimated trust income
- considering the tax position of beneficiaries
- checking cashflow between entities
- or simply making sure the current structure still works for the family or business goals.
Every trust is different
One thing we regularly explain to clients is that no two trust structures are exactly the same.
The trust deed sets the rules around how the trust operates, including who can receive distributions and how trustees need to document their decisions.
That’s why trust distribution minutes shouldn’t simply become a “same as last year” exercise without review.
Over time, circumstances change. Businesses grow, investments shift, family situations evolve and structures become more complex. EOFY is often a good opportunity to step back and make sure everything still aligns properly.
Don’t leave it until late June
When people leave trust distributions until the final few days of the financial year, it can create unnecessary stress and limit the opportunity to properly consider different options.
We work closely with clients to help make EOFY planning feel proactive, practical and easier to navigate.
You can catch us at our Epsom or Castlemaine office, give us a call or chat over a video meeting.
Something to watch: proposed changes to trust taxation
The 2026–27 Federal Budget has introduced a proposal that will be important for anyone with a discretionary trust to be aware of. From 1 July 2028, the Government is proposing a minimum 30% tax on discretionary trust income at the trustee level, regardless of how distributions are made to beneficiaries. This is a significant shift from how trusts have traditionally been taxed in Australia.
Under the current rules, trust income flows through to beneficiaries and is taxed at their individual marginal rates. The proposed change means a top-up tax would apply where a beneficiary’s rate falls below 30% – which directly impacts strategies where income is distributed to lower income family members such as a non-working spouse or a child studying part time.
This makes the decisions you make in your trust distribution minutes even more consequential in the years ahead. With a 2028 start date, there is still time to review your structure, but waiting is not advisable, these changes may require careful consideration of whether your current trust arrangements still work for your situation.
Important note: The legislation has not yet been passed and key details are still subject to consultation. We will keep clients updated as more clarity emerges.
If you have a discretionary trust and want to talk through what this might mean for you, get in touch with our team at our Epsom or Castlemaine office.