As the 2024–25 financial year draws to a close, business owners must take key steps to finalise their financial and tax obligations by 30 June 2025. Among the most critical actions are:
- Making Trustee Resolutions, and
- Managing Division 7A Loan implications.
Failing to act before the 30 June deadline could result in unintended tax consequences and compliance issues. Now is the time to review your trust and company structures to ensure all necessary actions are completed on time.
Trustee Resolutions: Must Be Made Before 30 June
If your trust distributes income to beneficiaries, a valid resolution must be made by 30 June to determine who is assessed on the trust’s taxable income.
Key Considerations:
- Timing matters: Check your trust deed—some require resolutions before 30 June, such as by 28 June.
- Capital Gains and Franked Dividends:
- Capital gains can be distributed via resolution up to 31 August 2025.
- Franked dividends must be resolved by 30 June 2025.
- Written documentation is highly recommended.
While not always legally required, a written resolution helps avoid disputes and is essential when streaming capital gains or franking credits. - If your trust deed sets an earlier date, comply with that deadline instead of 30 June.
Division 7A Loans: Declare Dividends Before 30 June
If your company has Division 7A loans and you plan to use dividends to meet the Minimum Yearly Repayment (MYR), these dividends must be declared by 30 June 2025.
Other key Division 7A compliance tasks:
- Ensure 2024–25 loans are either fully repaid or under a complying loan agreement by your tax return due date.
- For prior year loans (2023–24 and earlier), the MYR must be paid by 30 June 2025.
- If MYR is unpaid from previous years, you may request relief from the ATO under section 109RD of the Income Tax Assessment Act 1936.
Failing to meet these conditions can breach Division 7A rules and invalidate the use of set-offs between loans and dividends.
Don’t Leave it Too Late
Taking timely action ensures your trust and company remain compliant and allows you to fully benefit from available tax planning strategies.
Need Help?
Navigating and complying with complex taxation obligations can be overwhelming and risky due to potential penalties. Therefore, it is important to seek advice from professional tax accountants and tax lawyers like the team at The Quinn Group, who use their knowledge and expertise to ensure you meet your obligations and legally minimise your tax liability.
Call us on 1300 (QUINNS) or + 61 2 9223 9166, or submit an online enquiry today and schedule a meeting or teleconference. We can discuss your specific needs regarding trustee resolutions, declaring dividends for Div. 7A loans, or any other taxation matter.
