Key Highlights

  • Trust distribution income for 2025–26 and later years is moving into myTax pre-fill.
  • Pre-fill only arrives after the trust has lodged its return.
  • Statements now carry three new labels for beneficiaries.
  • Pre-fill will extend to other entities from 2027.

If you receive income from a family or Investment trust, the ATO now wants to put that distribution straight into your tax return. Its updated guidance says trust distribution income for 2025–26 and later years will appear in myTax pre-fill. Trustees also have three new labels on distribution statements. With the self-lodgment deadline just past and agent-lodged returns still flowing in, beneficiaries are meeting the changes now.

The timing is pointed. Discretionary trusts are under scrutiny in Canberra this week, as a Senate committee examines the government's proposed 30% minimum tax on them.

What the ATO is changing

The ATO's page for trust beneficiaries, updated on 6 October 2026, says "details of your trust distribution income for your 2025–26 and later years will become available in pre-fill".

Its "What's new for individuals" page says the ATO is enabling pre-fill of trust distributions for individual taxpayers from 2026, and will extend it to other entities from 2027.

This is ATO administrative guidance about how returns are prepared. It doesn't change what income is taxable. Beneficiaries were always required to report their share of trust income. The difference is that the ATO will now show it to them, and can compare it more easily.

The ATO's Trustee bulletin says the pre-fill helps beneficiaries who use a different tax agent from the trust, or who prepare their own return in myTax.

In some family groups, a trust's Accountant may prepare the trust return, while adult children, grandparents or other relatives who receive distributions lodge separately, sometimes on their own.

Previously, those beneficiaries depended on getting the right figures from the trustee and copying them across correctly. Pre-fill gives them a second reference point, provided the trust has lodged.

It also means a mismatch between what the trust reported and what a beneficiary declared should be easier for the ATO to spot.

Pre-fill only arrives after the trust lodges

There is an important catch. The data appears only "once we've processed the trust's tax return and successfully matched the information to your records", the ATO says.

A trust may not have lodged by the time its beneficiaries are ready to file. In a May bulletin for trustees, the ATO encouraged them to "lodge your 2026 trust tax return as early as possible after 1 July 2026" so beneficiaries could benefit.

If the trust hasn't lodged, the pre-fill won't be there. The ATO tells beneficiaries to use the distribution statement from their trustee "to complete the trust distributions section in myTax when pre-fill is not yet available".

It also asks beneficiaries to "confirm that the details in the distribution statement match the pre-fill information in myTax", and to watch for myTax messages about trust distributions they may need to report.

The three new labels

For the 2025–26 year, the ATO has added three labels to the statement of distribution in the trust tax return. They then flow through to the statements beneficiaries receive:

  • B1: non-primary production managed investment scheme amount
  • U2: franked distribution related to investments amount
  • H1: other assessable foreign source income from a financial investment amount

The ATO says these help beneficiaries complete the "Net financial investment loss" question, labelled IT5, on their own return.

That label isn't about how much tax you pay on the distribution itself. It feeds income tests, which are used to work out things such as the Medicare levy surcharge, HELP repayment income and some offsets.

In effect, the new labels appear designed to separate out the investment-related part of a distribution. That should give the beneficiary, their agent and the ATO a clearer view of whether there is a net loss from financial investments that should be counted in those tests.

Hypothetical example: lodging before the trust

Hypothetical example: Lena prepares her own return in myTax and lodged in late October. She received a $12,000 distribution from her family's discretionary trust for 2025–26, but the trust hasn't lodged its return yet, so nothing appears in pre-fill.

If she relies only on pre-fill, the $12,000 is missing.

Assuming her other income keeps her in the 30% bracket, the missing distribution would mean $3,840 of unpaid tax, including the 2% Medicare levy:

  • $12,000 × 32% = $3,840

When the trust later lodges and the ATO matches the data, that gap could be picked up. The ATO could then amend her assessment, and shortfall interest or penalties could apply.

If she instead uses her trustee's distribution statement, including any amounts at the new labels, the income is reported from the start.

What else is coming for trust beneficiaries

The ATO flags another change for Tax Time 2027. Its beneficiary page says a new closely held trust measure may lead trustees to contact beneficiaries to ask for their tax file number.

Its May bulletin for trustees described proposed law that would "remove the requirement to lodge a TFN report for distributions made from 1 July 2026". It also reminded trustees that where a TFN hasn't been provided, "you may be required to withhold at the top tax rate". At the time, the ATO said that change was not yet enacted.

Separately, the Treasury Laws Amendment (Tax Reform No. 3) Bill 2026 and the Income Tax Rates Amendment (Minimum Tax on Discretionary Trusts) Bill 2026 passed the House on 29 October. They are bills, not law.

If passed, they would impose a 30% minimum tax on discretionary trusts from 1 July 2028, with restructure relief from 1 July 2027. Primary production income would be exempt.

Pre-fill and the new labels apply now, whatever happens to that legislation.

What to watch

  • 5–6 November: Senate Economics Legislation Committee hearings on the trust tax bills.
  • 13 November: the committee's report is due.
  • Now to 2027: 2025–26 trust distributions appear in beneficiaries' pre-fill as trust returns are processed and matched.
  • 2027: the ATO plans to extend trust distribution pre-fill to other entities.
  • Tax Time 2027: trustees of closely held trusts may contact beneficiaries for their TFN under a new measure.
  • 1 July 2028: proposed start date of the 30% minimum tax on discretionary trusts, if the bills pass.