Trust tax estimates for minor beneficiaries

[Barbara3]

I prepared a 2019 Trust tax return where the Trustee was being assessed on behalf of two minor beneficiaries and AE Tax produced a Tax Estimate which combined their share of income and calculated tax for the Trustee based on one tax free threshhold.  I advised the client that this tax would be claimed as a credit in the the kids separate tax returns (half in each) so we could get back all of the franking credits.

However, when the ATO issued the NOA for this Trust they issued two separate notices of assessments ie. one for each child and each had their own tax free threshhold so the amount of tax payable was different to what was originally calculated by AE Tax.

Is AE tax able to calculate separate amounts for each minor beneficiary? If so, how do I get this to happen? I need to do tax returns for four testamentary trusts again this year with numerous minor beneficiaries and I would like to be able to show the client what to expect from the ATO.

[Sandy_C]

Hi @Barbara3 

In MYOB Tax, in a Trust Return where multiple tax estimates are required, the result displayed is not generated based on each beneficiaries respective tax classification. 

MYOB advises that when running a tax estimate in a Trust return MYOB will only produce one tax estimate per return. In a Trust this estimate is based on the selected estimate category (otherwise referred to as the tax table) in the front cover of the trust return after entering Yes to the question Is any tax payable by the trustee. 

MYOB Tax does not produce multiple tax estimates in a trust.  They are not generated for each individual beneficiary based on their specific tax classification.

For further information, please refer to this help article: ET: Trust return does not produce multiple tax estimates to reflect the tax payable to each benefici...

Regards,

Sandy
Client Support Representative

[Barbara3]

Hi Sandy thanks so much for your prompt response which confirmed that there is no other way to process Trustee tax estimates. I have spoken with the ATO and they confirm that multiple tax estimates are required if there is more than one minor beneficiary and they were surpised that the tax software doesn't facilitate this. Perhaps this could be considered by your development team for the future?

Barbara

[Sandy_C]

Hi Barbara,

No worries at all. We have had a few queries with regards to producing estimates for multiple beneficiaries and was raised to our product development team.

However, due to the complicity of trust calculations, the enhancement request wasn't accepted as it involved a lot of coding adjustments to the trust returns themselves.

Regards,

Sandy
Client Support Representative