Legal Tip 198: Legal Tip Can a Discretionary Trust Distribute Income to a SMSF?

Discussion in 'Superannuation, SMSF & Personal Insurance' started by Terry_w, 8th May, 2019.

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  1. Terry_w

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

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    A SMSF is a trust and a discretionary trust could potentially distribute to another trust. But, the Trustee of a Discretionary Trust can only distribute income to beneficiaries of that trust if the SMSF meets the definition of beneficiary as defined in the deed. If the SMSF is a beneficiary of the discretionary trust then it would be possible for it to receive income and/or capital from the discretionary trust.



    BUT (and there is always a but) – just because it could be done doesn’t mean it should be done.

    See my tax tip for some of the tax consequences.
    Tax Tip 196: Discretionary Trusts distributing income to a SMSF
     
    Terry_w, 8th May, 2019
    #1