If you have a trust (discretionary/family or unit trust with special units), your annual trust distribution minutes must be prepared and signed before 30 June.
In family trusts, a beneficiary can be “presently entitled” to trust income. This means the trust has allocated income to the beneficiary but it has not been paid. This is called an unpaid present entitlement (UPE). In simple terms, this means the trust owes money to the beneficiary.
In the last edition of our newsletter, we touched upon the High Court’s Decision regarding Unpaid Trust Entitlements (UTE) aka the Bendel case. The Bendel case refers to the Full Federal Court decision in Commissioner of Taxation v Bendel [2025] FCAFC 15 (Bendel), which challenged the Australian Taxation Office’s (ATO) longstanding position on the tax treatment of unpaid present entitlements (UPEs) to corporate beneficiaries in trusts.
The Full Federal Court has dismissed the ATO’s long-standing position that an unpaid present entitlement (UPE) from a trust to a private company should be treated as a loan under the Division 7A deemed dividend rules.
You spend years working hard to accumulate your assets, but do you have the right strategies in place to protect those assets?