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If you receive a distribution from a trust and both the following apply:

  • it is not a distribution of beneficiary income that you have included in your individual tax return (IR3)
  • you are not a settlor of the trust

then you need to include this distribution as part of your income for Working for Families and student loans.

This increases your income for:

  • student loans from 1 April 2014
  • Working for Families from 26 June 2019.

You do not need to tell us about this sort of adjustment before these dates.

Example

Matt is the beneficiary of a family trust that has a cash PIE investment. The income was taxed at the 28% notified prescribed investor rate (PIR). This means that when the trust pays this income on to Matt, he does not need to include it in his tax return.

The trust does not have any other taxable income so any distributions it makes to Matt are not treated as beneficiary income.

The trust distributes $2,000 income from the PIE investment to Matt. He does not include the income in his tax return, but the distribution is part of his income for Working for Families and student loans and he needs to let us know how much he received.

Last updated: 28 Apr 2021
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