I got a distribution from my family trust — do I have to lodge a separate schedule now?

Your family runs a business — a restaurant, an import company, a professional practice — through a family or discretionary trust, and each year as 30 June approaches the trust makes a resolution: who gets what share of this year's profit. A slice lands with you, another with your spouse, maybe some with an adult child at university. The money is real, but the paperwork has always felt like the accountant's problem. This year there's one piece of it worth understanding yourself, because it now sits on your own return.

Yes — the trust income schedule, and who has to lodge it

If you were made entitled to a distribution from a trust, the ATO requires a trust income schedule to be completed and lodged with your tax return. In its own words, you complete the schedule 'if you have been made entitled to any distributions from a trust' — and that applies whether you report the distribution as an individual, a company, a partnership, another trust or a self-managed super fund. It isn't optional and it isn't only for large structures; a single distribution from one family trust is enough to bring you inside it.

The good news is that for most people it's less work than it sounds. If you're an individual lodging your own return through myTax, the schedule is built into myTax — you enter the distribution details where you always have, and the schedule is generated behind the scenes. If a tax agent lodges for you, it's integrated into their software too. What you need to hand over is the same thing you always needed: the statement of distribution (sometimes called a distribution advice) from the trustee — one for each trust that made you entitled to an amount. Without that statement, no one can complete the schedule correctly.

The rule that trips people up: 'entitled', not 'paid'

Here's the misconception that produces the nastiest surprises. People assume that if the trust never actually paid the money into their bank account, there's nothing to report. That's not how trust income works. The ATO is explicit: if you were entitled to an amount of trust income on 30 June, you have to include your share of the net income of the trust in that year's return — 'even if you didn't receive an amount from the trust until after 30 June.' Present entitlement is what triggers the tax, not the cash hitting your account.

This bites in exactly the situation family businesses run into all the time: the trust resolves on 30 June to distribute a share of the year's profit to you, but the cash stays in the business to fund next year's stock or wages. You've been made presently entitled — so it's your assessable income this year, it goes on your return, and it needs the trust income schedule behind it. The amount sitting unpaid inside the business doesn't change any of that.

What's changing from 1 July 2026

There's a second reason this is worth your attention now. As part of a project the ATO calls Modernising Trust Administration Systems (MTAS), the reporting around trust distributions is being upgraded from 1 July 2026. From that date, trustees will provide additional information in your distribution statement to help you report your income correctly, and — if you lodge through a tax agent — trust distribution income will start to become available as pre-fill once the trust's own return has been processed and matched to you.

Two of the new items are worth naming, because they signal where the ATO is looking. Trustees will now report unpaid present entitlements — the amounts you're entitled to but that stay in the business — specifically so the ATO can, in its words, 'identify high-risk arrangements'. They'll also report rateable reduction amounts for franked distributions and capital gains, so beneficiaries report those correctly. The direction of travel is clear: the ATO increasingly receives the trust's side of the story directly and matches it against what each beneficiary puts on their own return. A distribution reported by the trust but left off your return is precisely the kind of mismatch that gets flagged.

So the practical version is calm. If you received — or were made entitled to — a distribution from a family or discretionary trust this year, it belongs on your return, the trust income schedule goes with it, and the one document that makes it all work is the statement of distribution from the trustee. Chase that statement early rather than the night before you lodge, and make sure the figure on your return matches what the trust reported.

This is general information current as at July 2026, not advice for your situation — how these rules apply depends on your trust's deed, the resolution made before 30 June, and the type of income distributed to you. If your family runs a business or holds investments through a trust, getting the distribution, the resolution and the schedule lined up before you lodge is far cheaper than untangling a mismatch afterwards. That is what our companies, trusts and bookkeeping service is for.