Tax reporting and tax rates

A trust must have its own tax file number for lodging its annual income tax return. The tax return must show all income and deductions of the business and any distributions to its beneficiaries. 

Beneficiaries report their share of trust income in their respective individual income tax returns. 

The individual tax rate applies to the income paid to beneficiaries of a trust. This means trust beneficiaries pay tax at the ordinary individual tax rates and can apply the tax-free threshold. You won’t have to pay tax on the first $18,200 earned. This is on all earnings including any non-business income. 

Special rules apply to the income earned by individuals under 18. Certain types of income, such as a distribution from a family trust, may be taxed at higher rates.

Starting a small business

Steps Progress

Is my hobby a business?

9 mins

Business structures overview

5 mins

Business registrations

5 mins

Sole trader structure

7 mins

Partnership structure

10 mins

Company structure

13 mins

Trust structure

7 mins

Small business support

10 mins

Related courses

1 mins

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