SAMPLE RESOLUTION 1 – NO INCOME STREAMING
This Template demonstrates the situation where the trustee is not seeking to stream either capital
gains or franked distributions to beneficiaries.
In this particular example, the trustee determines that the income of the trust for the year will be net
income as defined in section 95 of the Income Tax Assessment Act 1936 less any amounts not actually
receivable by the trustee (i.e. items of “income” which are not accretions to the trust fund – notional
amounts).
Examples of where this type of resolution might be appropriate are:

where the trust has not derived capital gains and/or franked distributions during the year;

where the trust has derived capital gains and/or franked distributions during the year, but
determines not to stream those items – beneficiaries receiving trust income will share the
capital gains and/or franked distributions proportionately to their entitlements to trust income;

where the trust derives a capital gain which results in no net gain due to the application of
current year or prior year capital losses;

where the trust derives a franked distribution, which is reduced to nil by directly related
expenses.
TRUSTEE/S RESOLUTION
[TRUST NAME]
The persons signing below being all of the Trustees or all directors of the corporate Trustee of the
Trust resolve as follows:
CONSIDERED:
The Trustee considered:
1.
the trust deed for the Trust (as amended) (the "Trust Deed");
2.
the financial transactions of the Trust for the financial year ended
[YEAR].
RESOLVED:
The Trustee resolves that all actions of the Trustees during the year relating to
the investment or expenditure of Trust moneys and application of income be
ratified and confirmed.
DEFINED TERMS:
The Trustee resolves that if a word or phrase is given a defined meaning in the
Trust Deed, that word or phrase will have the same meaning in these
resolutions.
INCOME
DETERMINATION:
ACCUMULATION:
The Trustee determines, in accordance with the Trustee’s discretion in the
definition of “Income” in clause 1.1 in the Trust Deed, that the Income of the
Trust, for the financial year ending 30 June [YEAR], will be the “net income” as
defined in section 95 of the Income Tax Assessment Act 1936 less any amounts
or credits (including franking credits) which are included as income for the
purposes of the Income Tax Assessment Acts but not actually paid or payable to
the Trustee.
The Trustee determines, in accordance with the Trustee’s powers in clause
5.4(a)(ii) in the Trust Deed, to accumulate an amount of the Income as
determined by the Trustee as follows:
Amount or % of Income to be accumulated
SIGNATURE:
__________________________________________
Trustee
Dated
/
/
__________________________________________
Trustee
Dated
/
/
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TRUSTEE/S RESOLUTION
[TRUST NAME]
INCOME
DISTRIBUTION:
The Trustee determines, in accordance with the Trustee’s discretion in clause
5.4(a)(i) in the Trust Deed, that the Income of the Trust for the year (less any
amount to be accumulated as specified above) be paid, applied or Set Aside to,
or for the benefit of, the following Beneficiaries in the amounts or proportions as
follows and in the following order of priority:
Amount or % of
Income paid, applied
or Set Aside for the
Beneficiary
Beneficiary Name & Class
1
2
3
4
PRIORITY:
For the avoidance of doubt, where specific amounts are listed above and where
the Income of the Trust is insufficient to discharge the Trustee’s liability to pay,
apply or Set Aside these amounts, the Trustee determines to pay, apply or Set
Aside these amounts to fully discharge the entitlement of each Beneficiary
before any payment, application or Setting Aside to any Beneficiary following
them in the list.
SUB-TRUST:
The Trustee resolves that all amounts paid, applied or Set Aside by the Trustee
as specified above are held by the Trustee pending payment to the relevant
Beneficiaries on sub-trust in accordance with clause 7.4 of the Trust Deed.
RESOLVED:
The Trustee resolves that regardless of any addition or adjustment to the
Income after the date of these resolutions, the Income will be paid, applied or
Set Aside in accordance with the preceding resolutions.
SIGNATURE:
__________________________________________
Trustee
Dated
/
/
__________________________________________
Trustee
Dated
/
/
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TRUSTEE/S RESOLUTION
[TRUST NAME]
PRESENT
ENTITLEMENT:
PRIOR
PAYMENTS:
The Trustee confirms and acknowledges that each Beneficiary listed above has
an immediate and indefeasible vested interest in the Income distributed for their
benefit above and is presently entitled to the relevant share of the Income in
accordance with clause 5.8 of the Trust Deed.
The Trustee resolves that, if any Income of the Trust has been paid to any
Beneficiary or Beneficiaries during the year and prior to 30 June, those amounts
form part of the distributions made in accordance with the above resolutions and
are not in addition to them.
SIGNATURE:
__________________________________________
Trustee
Dated
/
/
__________________________________________
Trustee
Dated
/
/
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SAMPLE RESOLUTION 2 – INCOME STREAMING
This Template provides an example of where the trustee is seeking to stream either capital gains
and/or franked distributions.
In this resolution the trustee determines that the income of the trust for the year will be net income as
defined in section 95 of the Income Tax Assessment Act 1936 less any amounts not actually receivable
by the trustee (i.e. items of “income” which are not accretions to the trust fund – notional amounts). The
trust income will therefore be:

amounts that are income for tax purposes (other than capital gains); less

expenses attributable to the income for the purposes of the trust’s accounting records; plus

the gross amount of any capital gains (which are separated and identified for the purposes of
streaming) after the application of unrecouped capital losses.
This resolution does not provide for the application of capital losses against particular capital gains in
any order of priority. If the relevant trust deed permits the trustee to apply trust capital losses to capital
gains in this manner, there may be opportunities to increase the tax effectiveness of the distributions
(e.g. applying capital losses against non-discountable capital gains first). You should not rely on this
resolution and seek advice if your circumstances require such considerations.
Trustees who have not concluded that streaming of franked distributions and/or capital gains will be
effective for tax purposes should consider using Sample Resolution 1.
If a beneficiary is to be specifically entitled to the net financial benefit of a franked distribution, the
entitlement must be recorded no later than 30 June. This must be in writing.
If a beneficiary is to be specifically entitled to the net financial benefit of a capital gain, the entitlement
must be recorded in the trust’s accounts on or before 31 August. However, where a capital gain is
included in trust income, the trustee must deal with it by 30 June. Failure to do so may mean:

no beneficiary is presently entitled to the capital gain; or

the default beneficiaries may become entitled to the gain.
Sample resolution 2 records the beneficiary’s specific entitlement to any capital gain. If the resolution is
not signed and dated by 30 June, only the net capital gain will be included in trust income.
Trustees must take great care when streaming income. In some instances an attempt to stream income
may not achieve its intended objective or have other consequences. For example:

where a trust is able to reduce its net capital gain to nil using small business CGT concessions.
An attempt to stream a capital gain may result in beneficiaries being taxable in relation to other
trust income not applied for their benefit;

where a capital gain has been calculated under the market value substitution rule and cannot
be streamed, beneficiaries may be taxed on the notional gain based on their proportionate
entitlement to the other trust income;

where a trust derives capital gains and/or franked distributions only, and the shares are
negatively geared (meaning no net franked distributions), an attempt to stream a capital gain
may result in no income remaining to which beneficiaries can be presently entitled – no
beneficiary can therefore benefit from the franking credits.
Comment on Capital Gains
The streaming rules require that beneficiaries be made specifically entitled to the “net financial benefit”
of the gross capital gain. If a beneficiary is to be assessed on 50% of the taxable portion of a capital
gain, the trustee will need to stream 50% of the gross capital gain to that beneficiary.
For the purposes of streaming, this sample resolution deals with gross capital gains after applying
capital losses of the trust and prior to any reduction by way of CGT discounts or concessions. The net
financial benefit of the gross capital gain is only reduced by capital losses applied by the trustee for
accounting purposes, but only to the extent the capital losses are offset in the same way for tax
purposes. If there is a mismatch between the accounting and tax treatment of capital losses, the
“gross” capital gain will not be reduced by the capital losses.
Where more than one capital gain is derived, the trustee is required to determine if it will distribute the
entire capital gain or if it will distribute specific capital gains to certain beneficiaries.
TRUSTEE/S RESOLUTION
[TRUST NAME]
The persons signing below being all of the Trustees or all directors of the corporate Trustee of the
Trust resolve as follows:
CONSIDERED:
The Trustee considered:
1.
The trust deed for the Trust (as amended) (the "Trust Deed");
2.
The financial transactions and records of the Trust for the financial year
ended [YEAR].
RESOLVED:
The Trustee resolves that all actions of the Trustees during the year relating to
the investment or expenditure of Trust moneys and application of income be
ratified and confirmed.
DEFINED TERMS:
The Trustee resolves that if a word or phrase is given a defined meaning in the
Trust Deed, that word or phrase will have the same meaning in these
resolutions.
INCOME
DETERMINATION:
ATTRIBUTION:
The Trustee determines, in accordance with the Trustee’s discretion in the
definition of “Income” in clause 1.1 in the Trust Deed, that the Income of the
Trust, for the financial year ending 30 June [YEAR], will be:
(a)
the “net income” as defined in section 95 of the Income Tax Assessment
Act 1936 (other than capital gains included in (b) below) less any
amounts or credits (including franking credits) which are included as
income for the purposes of the Income Tax Assessment Acts but not
actually paid or payable to the Trustee; and
(b)
all capital gains (to the extent a capital gain remains after the application
of steps 1 and 2 in subsection 102-5(1) of the Income Tax Assessment
Act 1997 (Cth)).
The Trustee acknowledges that the Trust’s records enable the Trustee to
identify and characterise different classes of income and capital in accordance
with the Trustee’s powers in clauses 5.2 and 5.3 in the Trust Deed.
SIGNATURE:
__________________________________________
Trustee
Dated
/
/
__________________________________________
Trustee
Dated
/
/
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TRUSTEE/S RESOLUTION
[TRUST NAME]
ACCUMULATION:
The Trustee determines, in accordance with the Trustee’s powers in clause
5.4(a)(ii) in the Trust Deed, to accumulate an amount of the Income as
determined by the Trustee as follows:
Amount or % of Income to be accumulated.
SPECIFICALLY
FRANKED
DISTRIBUTIONS:
The Trustee determines, in accordance with the Trustee’s discretion in clause
5.4 in the Trust Deed, that the Income of the Trust comprising the following
specific franked distributions (less any expenses directly relevant to those
distributions) be paid, applied or Set Aside to, or for the benefit of, the following
Beneficiaries in the amounts or proportions as follows and in the following order
of priority:
Beneficiary Name & Class
Amount or % of
dividend Income paid,
applied or Set Aside
for the Beneficiary
Particulars of franked
distribution
(e.g. company, date,
source of payment)
1
2
3
4
SIGNATURE:
__________________________________________
Trustee
Dated
/
/
__________________________________________
Trustee
Dated
/
/
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TRUSTEE/S RESOLUTION
[TRUST NAME]
FRANKED
DISTRIBUTIONS:
The Trustee determines, in accordance with the Trustee’s discretion in clause
5.4 in the Trust Deed, that the Income of the Trust comprising those franked
distributions not otherwise identified and dealt with as “Specific Franked
Distributions” by this resolution above (less any expenses directly relevant to
those distributions) be paid, applied or Set Aside to, or for the benefit of, the
following Beneficiaries in the amounts or proportions as follows and in the
following order of priority:
Amount or % of
dividend Income paid,
applied or Set Aside
for the Beneficiary
Beneficiary Name & Class
1
2
3
4
SPECIFIC
CAPITAL GAINS:
The Trustee determines, in accordance with the Trustee’s discretion in clause
5.4 in the Trust Deed, that the Income of the Trust comprising the following
specific capital gains (to the extent a capital gain remains after the application of
steps 1 and 2 in subsection 102-5(1) of the Income Tax Assessment Act 1997
(Cth)) be paid, applied or Set Aside to, or for the benefit of, the following
Beneficiaries in the amounts or proportions as follows and in the following order
of priority:
Beneficiary Name & Class
Amount or % of
capital gain paid,
applied or Set Aside
for the Beneficiary
Particulars of capital
gain (e.g. discount
gain, other gain, asset
type, event, date)
1
2
3
4
SIGNATURE:
__________________________________________
Trustee
Dated
/
/
__________________________________________
Trustee
Dated
/
/
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TRUSTEE/S RESOLUTION
[TRUST NAME]
CAPITAL GAINS:
The Trustee determines, in accordance with the Trustee’s discretion in clause
5.4 in the Trust Deed, that the Income of the Trust comprising a capital gain (to
the extent a capital gain remains after the application of steps 1 and 2 in
subsection 102-5(1) of the Income Tax Assessment Act 1997 (Cth)) not
otherwise identified and dealt with as “Specific Capital Gains” by this resolution
above be paid, applied or Set Aside to, or for the benefit of, the following
Beneficiaries in the amounts or proportions as follows and in the following order
of priority:
Beneficiary Name & Class
Amount or % of
capital gain paid,
applied or Set Aside
for Beneficiary
Particulars of capital
gain (e.g. discount
gain, other gain, asset
type, event, date)
1
2
3
4
OTHER INCOME
DISTRIBUTION:
The Trustee determines, in accordance with the Trustee’s discretion in clause
5.4 in the Trust Deed, that the Income of the Trust for the year (less any franked
distributions and/or capital gains and/or any amount to be accumulated as
specified above) be paid, applied or Set Aside to, or for the benefit of, the
following Beneficiaries in the amounts or proportions as follows and in the
following order of priority:
Amount or % of
Income paid, applied
or Set Aside for the
Beneficiary
Beneficiary Name & Class
1
2
3
4
SIGNATURE:
__________________________________________
Trustee
Dated
/
/
__________________________________________
Trustee
Dated
/
/
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TRUSTEE/S RESOLUTION
[TRUST NAME]
PRIORITY:
For the avoidance of doubt, where specific amounts are listed above and where
the Income of the Trust is insufficient to discharge the Trustee’s liability to pay,
apply or Set Aside these amounts, the Trustee determines to pay, apply or Set
Aside these amounts to fully discharge the entitlement of each Beneficiary
before any payment, application or Setting Aside to any Beneficiary following
them in the list.
RESOLVED:
The Trustee resolves that regardless of any addition or adjustment to the
Income after the date of these resolutions, the Income will be paid, applied or
Set Aside in accordance with the preceding resolutions.
PRESENT
ENTILTEMENT:
PRIOR
PAYMENTS:
The Trustee confirms and acknowledges that each Beneficiary listed above has
an immediate and indefeasible vested interest in the Income distributed for their
benefit above and is presently entitled to the relevant share of the Income in
accordance with clause 5.8 of the Trust Deed.
The Trustee resolves that, if any Income of the Trust has been paid to any
Beneficiary or Beneficiaries during the year and prior to 30 June, those amounts
form part of the distributions made in accordance with the above resolutions and
are not in addition to them.
SIGNATURE:
__________________________________________
Trustee
Dated
/
/
__________________________________________
Trustee
Dated
/
/
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