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Australia Corporate Trustee Tax Guide

Australian corporate trustee taxation. The guide covers: the company as the trustee — the 'corporate trustee' is the 'company that acts as the trustee of the 'trust' (the 'discretionary trust', the 'unit trust', the 'hybrid trust', the 'SMSF'); the 'corporate trustee' is the 'legal owner' of the 'trust assets' and 'manages the trust on the behalf of the 'beneficiaries'; the 'corporate trustee' is the 'single director company' — the 'individual' may be the 'sole director and the sole shareholder' (the 'corporate trustee structure'); the 'corporate trustee' is the 'company limited by the guarantee' or the 'proprietary limited company (the 'Pty Ltd')'; the trust tax return and the corporate trustee — the 'corporate trustee' must 'lodge the trust tax return' (the 'trust return' — the 'form N' — the 'trust tax return for the trust') for the 'income of the trust' (the 'trust income is NOT taxed in the corporate trustee's company return'); the 'corporate trustee's own company tax return' (the 'corporate tax return — the 'company return') 'reports the income earned by the corporate trustee itself' (the 'director fees', the 'investment income', the 'capital gains'); the 'corporate trustee' must 'separate the trust tax affairs' from the 'company's own tax affairs' — the 'corporate trustee should have the separate 'ABN' and the 'TFN' for the 'trust' and the 'separate ABN' for the 'company'; the excepted trust rules — the 'excepted trust' is the 'discretionary trust that is 'treated as the 'fixed trust' for the 'tax loss purposes'' — the 'corporate trustee' of the 'excepted trust' may be 'subject to the 'tax loss recoupment rules' (the 'same business test' and the 'continuity of ownership test'); the 'corporate trustee' may 'elect to treat the trust as the 'fixed trust' under the 'excepted trust rules' for the 'loss recoupment purposes'; the penalties for the corporate trustees — the 'corporate trustee is 'personally liable' for the 'trust tax debts' (the 'trustee is liable for the tax of the trust' under the 'Section 254 of the ITAA 1936'); the 'corporate trustee may be 'liable for the director penalty notices (the 'DPNs')' for the 'unpaid PAYG withholding' and the 'unpaid GST' of the 'trust'; the 'corporate trustee must 'maintain the proper trust records' (the 'trust deed', the 'trust accounts', the 'minutes of the trustee decisions', the 'beneficiary resolutions'); the corporate trustee for the SMSF — the 'SMSF' may have the 'corporate trustee' (the 'company as the trustee of the SMSF') — the 'SMSF corporate trustee' is the 'company that 'holds the SMSF assets on the trust for the members'; the 'SMSF corporate trustee' is 'required for the SMSF' (the 'SMSF can have the 'individual trustees' or the 'corporate trustee'); the 'corporate trustee for the SMSF' provides the 'asset protection' and the 'limited liability'.

Corporate Trustee Structure

  • Company as trustee: The 'corporate trustee' is the 'company that manages the trust on the behalf of the beneficiaries'.
  • Separate tax returns: The 'trust tax return' and the 'company's own tax return' are 'lodged separately'.
  • Single director company: The 'corporate trustee' may be the 'single director and the single shareholder company'.

For the trust and the partnership tax rules, see our Trust & Partnership Tax Guide →.

Trust Tax & Excepted Trust

  • Trust return lodgement: The 'corporate trustee lodges the trust return' for the 'trust income'.
  • Excepted trust rules: The 'discretionary trust' may be 'treated as the fixed trust' for the 'loss recoupment'.
  • Trustee liability: The 'corporate trustee is 'personally liable for the trust tax debts'.

For the company tax returns and the company forms, see our Company Forms Guide →.

SMSF Corporate Trustee

  • Asset protection: The 'corporate trustee for the SMSF' provides the 'limited liability' and the 'asset protection'.
  • Required for new SMSFs: The 'corporate trustee is required for the 'SMSF' (the 'individual trustees' are also allowed).

For the SMSF rules and the self-managed super funds, see our SMSF Guide →.