Question: If a trust has an overall loss in a current financial year and also has some TFN withholding credit on interest income, are the beneficiaries entitled to that credit?

Answer

For the benficiaries to get credit, the TFN tax needs to be attached to a distribution.

If there is nothing to distribute, then there is no distribution.

Unlike franking credits, TFN tax would be refunded to the trust.

Credit for tax withheld where ABN not quoted C

Show each beneficiary’s share of credit for tax withheld where an ABN was not quoted.

Except for relevant trusts which have made beneficiaries specifically entitled to franked distributions or capital gains, you work out a beneficiary's share of the credit by multiplying the amount of tax withheld by the beneficiary's percentage share of the trust income. Show whole dollars only.

For trusts which have made beneficiaries specifically entitled to franked distributions or capital gains, you generally work out a beneficiary's share of the credit by multiplying the amount of tax withheld by their adjusted Division 6 percentage share. Show whole dollars only.

If there is trust income to which no beneficiary is presently entitled, show that share of the amount of tax withheld at C under Income to which no beneficiary is presently entitled at the end of item 54.

If the trust has no net income, the beneficiaries are not entitled to a share of the credit for tax withheld. Instead, show the sum of the amounts withheld at C under Income to which no beneficiary is presently entitled at the end of item 54.

The total of C amounts for each completed statement of distribution equals the sum of any credit claimed at:

  • T Tax withheld where ABN not quoted item 6
  • C Share of credit for tax withheld where ABN not quoted item 8.