Tax implications for Trusts in 2024

The Government recently released an Amendment Paper which includes some important tax implications for trusts.

The trustee tax rate will be increased from 33% to 39%. This change aligns the trustee tax rate with the top personal tax rate. The new rate of 39% would take effect from the 2024/25 income year.

Certain exemptions are included:

• A $10,000 trustee income threshold will be introduced, to ensure that trusts with no more than $10,000 of trustee income per year will continue to be taxed at 33 per cent rather than the top rate of 39%;
• The rate for estates remains at 33% for the year of death and the following three income years. It has also been recommended that energy consumer trusts and legacy superannuation funds will be excluded from the 39% trustee tax rate;
• Distributions to beneficiaries will still be taxed at the beneficiaries’ marginal tax rate, so this new tax rate will only affect earnings retained by the Trust.

If you are making decisions about setting up a Trust, or winding up a Trust, it pays to take tax advice.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.