Discretionary Trust distribution

Discussion in 'Accounting & Tax' started by thesuperman, 28th Jun, 2015.

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  1. thesuperman

    thesuperman Well-Known Member

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    If you have an adult who doesn't have any income for the financial year (except small amount of bank interest say $1k for example), what is the maximum total income the adult could earn both from a trust distribution & bank interest combined to not pay any tax or medicare levy? Is it $18,200 or can it be more than this because of the "low income tax offset". I'm a bit confused about how this would affect the overall total.
     
    thesuperman, 28th Jun, 2015
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  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    it is slightly more before of the offset.
     
    Terry_w, 28th Jun, 2015
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  3. thesuperman

    thesuperman Well-Known Member

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    After further searching I found this site: http://atotaxrates.info/individual-tax-rates-resident/tax-free-threshold/

    It says The Effective Tax-Free Threshold With LITO is $20,542. That means there won't be any tax or Medicare Levy due if the taxable income is exactly $20,542 for the financial year. Does that sound correct?
     
    thesuperman, 28th Jun, 2015
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  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Yes.
     
    Terry_w, 28th Jun, 2015
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  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    It may even be higher. Also bear in mind if they receive Centrelink benefits like Family Tax Benefits or HELP debts etc that a discretionary trust distribution may trigger a tsunami of issues.
     
    Paul@PAS, 29th Jun, 2015
    #5
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