About the MTAS project
The Modernisation of Trust Administration Systems (MTAS) project was first announced in the March 2022 Budget as the ‘Digitalising trust income reporting and processing’ measure. The project aims to:
- streamline the taxpayer lodgment experience
- improve the quality, accuracy and integrity of annual income tax return information reported by trustees and beneficiaries
- enable our compliance activities to be better informed.
The MTAS project will deliver changes to annual tax return forms, to simplify reporting for trustees, beneficiaries and their tax agents. Changes will begin on 1 July 2024, affecting lodgments for the 2023–24 income year and onwards. These changes include:
- modifying the labels in the statement of distribution – which is part of the trust tax return – to improve the reporting of beneficiary details
- introducing a new schedule (trust income schedule) that all trust beneficiary types who receive trust income will need to lodge with their tax return – this will assist correct reporting and facilitate consistency of reporting across all beneficiary types
- adding new data validations to the trust tax return form in the practitioner lodgment service – to strengthen the integrity of data reported through the lodgment process.
We'll implement further changes as the MTAS project progresses, and keep you informed of what those changes mean for you.
Who's affected by the changes?
Trustees
From 1 July 2024, you'll notice a change to the labels in the statement of distribution section of your trust tax return. We’re adding 4 capital gains tax (CGT) labels into the trust tax return statement of distribution. These changes will enhance your ability to appropriately notify beneficiaries of their entitlement to income, and support the calculation of their CGT amount in their tax return.
To support beneficiaries in correctly completing the trust income schedule, we recommend you provide them with a copy of the trust statement of distribution – so far as it relates to their entitlement to trust income.
If you are a trustee and a beneficiary of another trust, you'll be required to complete a trust income schedule. You should refer to your obligations as a beneficiary outlined below in Beneficiaries.
Beneficiaries
Your 2023–24 income year tax return will look different. Look out for the trust income schedule, which is a new form lodged with your income tax return. The trust income schedule replicates the fields from the statement of distribution. All you need to do is copy the information across.
Remember, you'll be able to get the information required in the trust income schedule from the trust. We recommend you ask the trustee for a copy of the trust statement of distribution – so far as it relates to your entitlement to trust income.
If you receive a distribution of trust income from a managed fund, this is should also be included in the new trust income schedule. The trust income schedule instructions will show you how the information on the tax statement provided by the managed fund is reported on the trust income schedule.
If you lodge via myTax, look for messages that prompt you about potential trust income reporting.
If you lodge via a tax agent, the new trust income schedule will be integrated into their existing lodgment software.
Tax agents
From 1 July 2024, we’re adding:
- 4 CGT labels into the trust tax return statement of distribution.
- data validations in the practitioner lodgment service to ensure accurate reporting.
These changes mean you'll no longer be able to submit without completing the necessary information.
The trust income schedule will now support the reporting of beneficiary trust income. The new schedule:
- won't replace any existing trust income labels in beneficiary income tax returns
- is intended to support existing reporting obligations
- for individual beneficiaries, and will be incorporated into the existing income details schedule
- for non-individual beneficiaries – via a new schedule lodged with each beneficiary income tax return.
Beneficiaries will be able to get the information required in the trust income schedule from the trust. As the trust income schedule has been designed to align to the information on the trust statement of distribution, you should encourage your trustee clients to provide beneficiaries the information required to complete the trust income schedule as early as possible, to assist them to complete their tax return.