TFN reporting for closely held trusts

Discussion in 'Legal Issues' started by thesuperman, 8th Jan, 2020.

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  1. thesuperman

    thesuperman Well-Known Member

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    TFN reporting is done using this form: https://www.ato.gov.au/assets/0/104/1909/2003/a1a126d3-cd35-44ac-901c-d74507f34fac.pdf

    Am I correct in understanding this needs to be done for all privately held discretionary trusts, unit trusts and hybrid trusts to report the TFN of their beneficiaries?

    What happens if this is lodged with the ATO late. Eg. due in July but lodged with the ATO in October? But the trust already has the TFN of the beneficiaries in their records (in writing) from earlier on?
     
  2. thesuperman

    thesuperman Well-Known Member

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    I'm a bit confused by the ATO site: Trust tax return instructions 2018

    It says:

    A closely held trust is:
    • a trust where 20 or fewer individuals have between them, directly or indirectly, and for their own benefit, fixed entitlements to 75% or more of the income or capital of the trust, or
    • a discretionary trust
    Does that mean a unit trust who's beneficiary is a hybrid trust doesn't have to do the TFN reporting but that hybrid trust will have to do TFN reporting if beneficiary of that hybrid trust is a person?
     
  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney

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    A unit trust is a closely held trust, as is a hybrid, as is a discretionary
     
  4. thesuperman

    thesuperman Well-Known Member

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    Ok thanks Terry.

    Does anyone know if there's any penalty for lodging this form to the ATO via postal mail a few months latest (even if the trust already has the TFNs of the beneficiaries recorded)? I can't seem to find anything from my Google searches.
     
  5. thesuperman

    thesuperman Well-Known Member

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    Checked the trust files, all the TFN Reports have previously been lodged on time. On one of the forms under "Beneficiary Details 1" the TFN details was accidentally missed out being put on the form when lodged with the ATO. The ATO never wrote back or contacted us saying that it was missed out on the form. Will this be an issue in the future? Is it a good idea to re-lodge a new TFN Report with all the exact same details but this time with the addition of the TFN of that person?
     
  6. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I have never seen it but the general Failure To Lodge on time issue may apply. It generally would see a caution for a first offence. Failing to report no TFN however is a different matter. A closely held trust generally has no such issue.

    I still question if the matter is even lawful. A taxpayer has a legal right to not quote a TFN to the ATO even on a TFN reporting form !! eg You can lodge a tax return or any form without a TFN. Electronically = No. Paper = Yes. The ATO merely suggest it may delay processing.