Case: The franked dividends are not showing up on the trust return, it go directly to the beneficiaries.
Note: When a company pays dividends to a trust that has multiple beneficiaries, the process in LodgeiT needs to be handled carefully to ensure accurate reporting in both the company’s and the trust’s tax returns.
Solution:
Step 1: Set Up the Share Register
Navigate to Company’s Tools > Share Registers > Shareholders.
Select the trust as the shareholder.
Mark "Shares are beneficially held" as Yes.
Do not enter any beneficiaries’ names at this stage.
This ensures the dividends flow directly to the trust, not individual beneficiaries.
Step 2: Add the Dividends
Record the dividends under the company.
Since no beneficiary is attached, the entire dividend amount will flow directly into the Family Trust.
These dividends will then appear in the Trust Tax Return under:
Income > Dividend section.
Step 3: Distribute to Beneficiaries
Open the Trust’s Tax Return.
Go to the Beneficiary section.
Manually distribute the dividend income to each beneficiary according to the trust’s distribution resolution.
Key Point:
- Dividends should first be received entirely by the trust. Only after that can they be distributed manually to beneficiaries through the Trust Tax Return > Beneficiary section.
The company pays dividends to the Family Trust (not directly to individual beneficiaries).
The dividends are first declared as trust income.
Distribution to each beneficiary is done manually within the Trust’s return under the Beneficiary section.