The Australian Tax Office (ATO) is currently reviewing adherence to certain trustee obligations, including the lodgement of Tax File Number (‘TFN’) reports for TFN withholding for closely held trusts.

Beneficiaries are required to quote their TFN to trustees to avoid having tax withheld from payments or unpaid present entitlements, and trustees must lodge a TFN report for any quarter in which a beneficiary quotes their TFN to the trustee.

If beneficiaries have not quoted their TFN to the trustee, the trustee must:

  • withhold tax at the rate of 47% from the distribution;
  • pay this tax to the ATO; and
  • report, in an annual report, details of all withheld amounts.

If you require assistance with lodging TFN reports, contact our team on (08) 9392 7600 or find out more about our business and taxation services here.