54 Statements of distribution

Last updated 11 February 2019

The information disclosed in the statement of distribution will need to be provided to each beneficiary to whom that information relates to allow them to complete their own tax return.

A trustee who needs to provide an annual report (under the trustee beneficiary (TB) rules), or annual trustee payment report (under the TFN withholding rules for closely held trusts) can do so by completing in full the details, including identifying information of beneficiaries, in the statement of distribution.

If required, the Annual TFN withholding report is lodged separately by either ELS or paper.

Before completing the statement of distribution, see appendix 11.

Failure to make a correct TB statement may result in liability for trustee beneficiary non-disclosure tax (TBNT), currently imposed at the rate of 49%.

Is a beneficiary presently entitled to a share of the income of the trust estate?

The way the net income of a trust is taxed will depend on whether there are beneficiaries presently entitled to a share of the income of a trust estate and whether the trust has derived capital gains or franked distributions which the trustee has 'streamed' to specific beneficiaries. In the absence of the trustee making certain beneficiaries specifically entitled to amounts of capital gains or franked distributions, a resident beneficiary who is presently entitled to a share of the income of the trust estate (for trust purposes) and is not under a legal disability is assessed on the same percentage share of the net income (for tax purposes) of the trust.

There are a number of steps in determining whether a beneficiary is presently entitled to a share of the income of the trust.

Step 1 – Calculate the income of the trust available for distribution

Determine the total income of the trust that was legally available for distribution to trust beneficiaries in the income year (the distributable income). This is the amount at A item 53.

Step 2 – Determine the beneficiary's entitlement to distributable income

Determine the amount of the trust's distributable income that the beneficiary was presently entitled at any time during the year, even if it has been paid or applied on their behalf. A beneficiary's entitlement to income may be prescribed by the deed, or it may depend on the exercise of a trustee's discretion.

A beneficiary will be deemed to be presently entitled to the income of a trust estate if they have an indefeasible vested interest in that income. An indefeasible interest is one that cannot be brought to an end or varied, for example, it is not able to be varied by the exercise of a power by the trustee or another person. A vested interest is one that presently exists. However, it can be either a present right or one that can be enjoyed in the future.

The principal beneficiary of a special disability trust is considered to be presently entitled to all of the net income of the trust.

Step 3 – Calculate the beneficiary's percentage share of the distributable income

Convert each beneficiary’s entitlement to the distributable income to a percentage share of the total distributable income. This percentage share is relevant in working out the amount of the trust's net income (for tax purposes) that is assessed to a beneficiary (or to the trustee on the beneficiary's behalf where the beneficiary is under a legal disability or is a non-resident at the end of the income year). It is also relevant to the allocation of certain types of income, tax credits and other trust amounts to beneficiaries.

A beneficiary will also be taken to be presently entitled to any income they are paid or that is applied on their behalf, at the discretion of the trustee.

Step 4 – Apply relevant adjustments

Law changes applicable from the 2010–11 income year allow the streaming of franked distributions and capital gains to beneficiaries for tax purposes. Broadly, beneficiaries who are made specifically entitled to the trust's capital gains will be taken to have made capital gains referable to so much of those gains as are included in the trust's net income (with appropriate adjustments for any CGT discounts or concessions). Beneficiaries who are made specifically entitled to the trust's franked distributions will be assessed on so much of those distributions as are included in the trust's net income, as well as on any corresponding franking credits.

In these circumstances, to work how much of the balance of the trust's net income for tax purposes (that is, excluding capital gains and franked distributions that any entity is specifically entitled to) is assessed to relevant beneficiaries or the trustee, in a practical sense the trustee will generally need to use the beneficiaries (or trustee's) adjusted Division 6 percentage share instead of their percentage share of distributable income calculated at step 3. The adjusted Division 6 percentage is broadly the income of the trust estate to which a beneficiary is presently entitled, ignoring any franked distributions and capital gains to which they are specifically entitled, divided by the income of the trust calculated, on the assumption that it excludes any capital gains or franked distributions to which any entity is specifically entitled. For a trustee, if the sum of the adjusted Division 6 percentage of all beneficiaries is less than 100%, the difference is the trustee's adjusted Division 6 percentage.

These law changes do not apply to managed investment trusts unless their trustees choose for them to apply.

Trusts that are not subject to the new law or that are not in receipt of franked distributions or capital gains during the income year will not have to calculate an adjusted Division 6 percentage and instead will just use each beneficiary's percentage share of distributable income calculated above.

Similarly, for trusts in receipt of capital gains or franked distributions, if no beneficiaries (or the trustee) are specifically entitled to such amounts, the two percentage shares will be the same.

These adjustments can only apply if total net income of the trust for tax purposes is greater than zero.

See also:

Technical update

Is there income of the trust estate to which no beneficiary is presently entitled?

Include at the end of item 54 at Income to which no beneficiary is presently entitled that part of the net (taxable) income of the trust at item 26 Total net income or loss that has not been assessed to either

a beneficiary
the trustee on behalf of a beneficiary who is presently entitled to a share of the income of the trust but is either
- not a resident at the end of the income year
- under a legal disability.

The trustee also prints X in the Yes box at Is any tax payable by the trustee? on page 2 of the trust tax return.

Generally, to work out the amount to record at A, B, U, F, G and H at the end of item 54, convert the amount of the trust's distributable income to which no beneficiary is presently entitled as a percentage of the total distributable income, and multiply this result by the component of the trust's net income that relates to each entry.

As a result of the legislative changes referred to above, if the trust has beneficiaries (or the trustee) that are specifically entitled to amounts of capital gains or franked distributions, the amount recorded at A, B, U, F, G and H at the end of item 54 will need to be calculated having regard to the adjusted Division 6 percentage share of the income of the trust.

For more information on these changes, see Technical update.

The trustee is assessable under section 99A of the ITAA 1936 and is liable to pay tax at the highest marginal rate on that part of the net income of the trust that has not been assessed to a beneficiary or to the trustee on a beneficiary's behalf. The applicable tax rate is the highest marginal rate of tax for resident individuals.

However, section 99A of the ITAA 1936 will not apply if the Commissioner thinks it would be unreasonable for the special rate of tax to apply to the net income of a trust estate that:

resulted from the will or intestacy of a deceased person
consists of property either of a bankrupt vested in the official receiver in bankruptcy or that is being administered under Part XI of the Bankruptcy Act 1966 (as amended).
consists of property that was transferred to the trustee for the benefit of the beneficiary
- by way of, or in satisfaction of a claim for, damages for loss of parental support, personal injury, disease, or physical or mental impairment
- by way of workers or criminal injury compensation
- directly as a result of the death of a person and from the proceeds of a life assurance policy, a superannuation fund or an employer of the deceased person
- out of a public fund established and maintained exclusively for the relief of persons in necessitous circumstances
- as a result of a family breakdown.

Where the Commissioner exercises his discretion that it would be inappropriate for section 99A to apply to the trust for an income year, the trustee will pay tax at concessional rates.

For deceased estates that are resident trust estates and in respect of which the Commissioner has exercised his discretion, the general individual rates apply for the year the deceased died and the following two years. The trustee also has the benefit of the full tax-free threshold of $18,200. For the fourth and subsequent years, different progressive rates apply as shown in table 9.

For other resident trust estates in respect of which the Commissioner has exercised his discretion to not apply section 99A in assessing the trustee, the concessional rates shown in table 9 also apply.

Table 9
Amount of trust net income assessable to trustee ($)	Tax on column 1 ($)	% on excess (marginal rate)
416	Nil	50
670	127.30	19*
37,000	7,030	32.5
80,000	21,005	37
180,000	58,005	47

*Income from $670 to $37,000 is taxed at a flat rate of 19%.

If you would like the Commissioner’s discretion to be exercised, submit full details in support of the request. Also provide:

details of the balance sheet capital accounts
if shares are held in private companies and special rights attach directly or indirectly to those shares, a statement showing
- the name of the company
- the class and paid-up value of the shares
- details of the special rights
- whether those rights have been exercised during the year
if a loan has been made to or by the trust, a statement showing the nature of the debt, the terms of the loan and the borrower’s or lender’s full name, address and family relationship, if any, to the beneficiaries
- full details for such loans if relatives of the beneficiaries or other persons not at arm’s length have made loans to a private company in which the trust holds shares, or to a partnership in which the trustee is a partner
- the names of any other trusts to which the person has contributed in the ways mentioned or in which the beneficiaries of the trust lodging this tax return are interested
  - this information need not be furnished for public securities, debentures in public companies and loans made in normal commercial transactions where the parties are at arm’s length
if a person, other than in a purely commercial transaction at arm’s length, has directly or indirectly transferred money or property to the trust, conferred benefits on the trust or conferred special privileges on the property of the trust, the full name and address of the person and the family relationship, if any, of that person to the beneficiaries
names of any other trusts to which the person in 3 or 4 has contributed in the ways mentioned in those sub-paragraphs or in which the beneficiaries of the trust lodging this tax return are interested
details of property which has been transferred to a trust by a relative of the beneficiaries, and income from that property which must or may be used to pay for that property.

If the Commissioner has exercised his discretion in relation to an earlier income year of the trust, you are not required to request the Commissioner to reconsider this for each subsequent income year unless material changes have occurred. In this case, you must provide a statement on a separate sheet of paper advising what material changes have occurred.

Attach the statement to the tax return and print X in the Yes box at Have you attached any ‘other attachments’? at the top of page 1 of the tax return.

Can trust capital gains be reduced by the CGT discount and/or the small business 50% reduction where there is income to which no beneficiary is presently entitled?

If the trustee is assessable under section 99A of the ITAA 1936 on some or all of the net income of the trust, capital gains included in that part of the trust’s net income are not eligible for the CGT discount and the small business 50% reduction (see section 115-222 of the ITAA 1997).

If the trustee is assessable under section 99A of the ITAA 1936 on some or all of the net income of the trust and the amount on which the trustee is assessed includes a capital gain to which either the CGT discount or the small business 50% reduction has been applied (but not both), work out the amount assessable to the trustee under section 99A as if the part attributable to the capital gain was double the amount it actually is.

If the trustee is assessable under section 99A of the ITAA 1936 on some or all of the net income of the trust, and the amount on which the trustee is assessed includes a capital gain to which both the CGT discount and the small business 50% reduction have been applied, work out the amount assessable to the trustee under section 99A as if the part attributable to the capital gain was four times the amount it actually is.

Provide a statement on a separate sheet of paper showing details of the amount assessable under section 99A using the above method. Attach the statement to the tax return and print X in the Yes box at Have you attached any ‘other attachments’? at the top of page 1 of the tax return.

Has the trust received an employment termination payment (ETP) or superannuation lump sum?

Include death benefit ETPs and superannuation lump sums on the statement of distribution at B at the end of item 54 at Income to which no beneficiary is presently entitled and in which no beneficiary has an indefeasible vested interest, and the trustee’s share of credit for tax deducted.

The trustee is liable to pay the tax, if any, on these amounts. The amount of tax payable by the trustee depends on the components of the ETP or superannuation lump sum and the extent that the dependants of the deceased have benefitted from the estate. For more information on ETPs and superannuation lump sums, see item 13 Superannuation lump sums and employment termination payments.

Has the trust received a listed investment company (LIC) capital gain amount?

If the following persons or entities are beneficiaries and the trustee claimed a deduction in respect of a LIC capital gain amount in calculating the trust's net income for tax purposes, the trustee must advise these beneficiaries of their share of the deduction:

trustee of a trust
trustee of a superannuation entity
company (including a life insurance company)
partnership.

Each beneficiary's share of the deduction is so much of that deduction as is reflected in their share of the net income of the trust.

Completing item 54

The total of the amounts at N, A, B, U, F, G and H on this statement equals the amount at item 26 Total net income or loss, except in the case:

of certain ETPs, as covered in item 13 Superannuation lump sums and employment termination payments
where a beneficiary’s or a trustee’s share of franking credits at N has been reduced because of an entitlement to a foreign income tax offset
where part of the net income is not taxable either to the trustee or beneficiary.

If part of the net income is not taxable to either the trustee or a beneficiary, for example, where it is not attributable to sources in Australia and it relates to a share of income that a non-resident beneficiary, who is not the trustee of another trust, is entitled to:

attach a statement highlighting this to the tax return
print X in the Yes box at Have you attached any ‘other attachments’? at the top of page 1 of the tax return
include the information outlined at Non-resident beneficiaries.

If part of a distribution is not taxable to either the trustee or a beneficiary, for example, the distribution to a non-resident beneficiary includes dividends, interest or royalties on which withholding tax has been withheld and remitted to us, franked dividends excluded from non-resident withholding tax, or a distribution to a foreign resident which requires an Australian managed investment trust to withhold an amount:

attach a statement highlighting this to the tax return
print X in the Yes box at Have you attached any ‘other attachments’? at the top of page 1 of the tax return
include the information outlined at Non-resident beneficiaries.

Trust losses

A trust cannot distribute an overall trust loss. In these circumstances, there will be no income of the trust estate to which any beneficiary can be presently entitled, which will generally result in the trustee being assessed on any net income of the trust for tax purposes, if there is any. However:

a beneficiary still may be able to be made specifically entitled to (and assessed in respect of) a capital gain if it forms part of the capital of the trust rather than being included in the calculation of trust income
you may still need to record certain information in the statements of distribution for the purposes of certain primary production concessions, see below at Beneficiaries of primary production trusts that report a loss.

If the trust has overall income, but has a negative net income for tax purposes, it cannot distribute that tax loss to beneficiaries.

Beneficiary details

If the number of beneficiaries exceeds five

For paper tax returns, if there are more than five beneficiaries, photocopy extra pages and complete the statement of distribution for each additional beneficiary.

Attach the additional beneficiary details to the tax return and print X in the Yes box at Have you attached any ‘other attachments’? at the top of page 1 of the tax return.

Complete the statement of distribution even for those beneficiaries under a legal disability on whose behalf the trustee will be assessed.

Beneficiary 1, Beneficiary 2, Beneficiary 3, Beneficiary 4, Beneficiary 5

For each beneficiary presently entitled or having an indefeasible and vested interest in trust income, show:

for individuals
- tax file number (TFN)
- full name, including title, surname or family name, and given names
- residential address (street address, not PO Box)
- date of birth
- entity type code
for non-individuals
- TFN
- full name of entity, for example, ABC Trust
- business address (street address not PO Box)
- entity type code.

Entity code

Print the appropriate code for the beneficiary entity type:

C for Company
F for Fund
I for Individual
P for Partnership
S for Self-managed super fund
T for Trust.

Ensure you complete these details fully and in the correct area.

Example 11

If the beneficiary is a company, then complete the details as:

Tax file number: 123 456 789

Entity code: C

Non-individual name: John Smith Pty Ltd

Business address: 123 Brown Street

Suburb/town: Melbourne

State/territory: Vic

Postcode: 3000

Assessment calculation code V

Insert an assessment calculation code from appendix 12 for each beneficiary presently entitled to a share of the income of the trust (even those beneficiaries under a legal disability on whose behalf the trustee will be assessed), and also for income to which no beneficiary is presently entitled and in which no beneficiary has an indefeasible vested interest.

Bankrupt estates are lodged under assessment calculation code 37.

Share of income of the trust estate W

At W show each beneficiary’s share of the income of the trust estate recorded at A item 53 Income of the trust estate to which they are presently entitled.

A beneficiary's entitlement to income may be prescribed by the deed, or it may depend on the exercise of a trustee's discretion. A beneficiary will be taken to be presently entitled to any income they are paid or that is applied on their behalf, at the discretion of the trustee.

The principal beneficiary of a special disability trust is considered to be presently entitled to all of the net income of the trust. For more information, see 53 Income of the trust estate.

Credit for tax withheld – foreign resident withholding L

Show each beneficiary’s share of credit for tax withheld where income of the trust is subject to foreign resident withholding.

Except for relevant trusts that 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 that 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 L 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 L under Income to which no beneficiary is presently entitled at the end of item 54.

The total of the amounts at L must equal the total amount of credit shown on the tax return at U item 6 and U item 8.

You only complete this entry if the trust is a non-resident trust and the amount was withheld in Australia and remitted to us.

Australian franking credits from a New Zealand franking company N

Include at N the beneficiary’s share of the Australian franking credit received from a New Zealand franking company, including any amounts received through another trust or a partnership. The beneficiary's share of this credit is broadly calculated as the sum of:

the credit attaching to any part of the relevant distribution from the New Zealand franking company to which the beneficiary is specifically entitled, plus
the beneficiary's adjusted Division 6 percentage of the credit attaching to any part of the relevant distribution to which no beneficiary is specifically entitled.

The amount at N is not necessarily the amount that can be claimed by each beneficiary.

If the beneficiary is under a legal disability, the trustee will be assessed, see above. In these circumstances, include at N in the beneficiary's statement of distribution the amount of Australian franking credits attached to a New Zealand franking company dividend allowed to the trustee.

If there are relevant distributions to which no beneficiary is presently entitled, include the trustee's share of the Australian franking credits attached to a dividend paid by a New Zealand franking company at N under Income to which no beneficiary is presently entitled at the end of item 54. The trustee's share is worked out in the same way as their share of the franking credit on a franked distribution by an Australian company, see below.

Under section 220-405 of the ITAA 1997, the Australian franking credits may be reduced by the relevant part of the supplementary dividend paid by the New Zealand franking company if:

the supplementary dividend was paid in connection with the franked dividend
the beneficiary under a legal disability or trustee is entitled to a foreign income tax offset because the franked dividend is included in their assessable income. For more information, see appendix 1.

Amounts shown at N are not included at D Franking credits.

Share of income A and B

Show each beneficiary’s share of the trust's primary production income and non-primary production income included in the net income of the trust for tax purposes at A and B, except to the extent that these amounts are recorded at other labels, at item 54.

The trust's primary production income is generally indicated at items 5 Business income and expenses and 8 Partnerships and trusts, less any primary production deductions.

The trust's non-primary production income is the amount shown at item 26 Total net income or loss, less:

primary production income as calculated above
amounts attributable to capital gains (shown at item 21 Capital gains)
foreign income included at items 22 Attributed foreign income and 23 Other assessable foreign source income.

All of these amounts are shown at separate labels in the distribution statement.

While the trust's non-primary production income includes franked distributions, for the purpose of recording beneficiaries' shares of franked distribution included in the net income of the trust in the distribution statement, these amounts should not be shown at B. Franked distributions (both fully and partially franked) should be shown at U in the distribution statement. Unfranked distributions should continue to be shown at B.

The amount shown at A is worked out by multiplying the primary production income by the beneficiary's percentage share of the trust's income or adjusted Division 6 percentage share, in the case of relevant trusts with capital gains or franked distributions that any beneficiary (or the trustee) is specifically entitled to in full or in part.

For trusts that did not receive franked distributions either directly or indirectly through a partnership or trust during the income year and did not have any capital gains that any beneficiary (or the trustee) was specifically entitled to, the amount shown at B is worked out by multiplying the non-primary production income by the beneficiary's percentage share of the trust's income.

The non-primary production income amount shown at B will need to be worked out differently if the trust:

is a relevant trust with capital gains or franked distributions that any beneficiary (or the trustee) is specifically entitled to in full or in part, or
is a managed investment trust (MIT) that has not elected to apply the new streaming provisions.

Legislative changes provide for the streaming of franked distributions and capital gains to beneficiaries for tax purposes. The amendments apply from the 2010–11 income year and introduced the concept of specific entitlement. This broadly ensures that a beneficiary (or trustee assessed on behalf of a beneficiary) that has been streamed a franked distribution by the trustee, and will receive the benefits of that distribution, is assessed on the amount of the franked distribution included in the net income of the trust and on the franking credits attached to that distribution (the gross-up amount). Similar rules apply in respect of any capital gains of the trust.

These law changes do not apply to managed investment trusts unless they choose for them to apply.

For relevant trusts with capital gains or franked distributions that any beneficiary (or the trustee) is specifically entitled to in full or in part, the amount shown at B in respect of a beneficiary should include the beneficiary's adjusted Division 6 percentage of all other non-primary production income of the trust, excluding franked distributions.

Franked distributions are now shown at U, see Franked distributions U.

See also:

Technical update

For MITs that have not elected to apply the new streaming changes, the amount at U Franked distribution will also be required to be worked out differently if the MIT received any franked distributions (either directly or indirectly via a partnership or another trust) during the income year. For each beneficiary:

multiply the non-primary production income by the beneficiary's percentage share of the trust's income
subtract the beneficiary's proportionate share of franking credits included in the trust's net income (calculated as an amount equal to the total franking credits included in the trust's net income (at D item 8, and at M item 12) multiplied by the beneficiary's percentage share of the trust income), and
add the beneficiary's share of franking credits that reflect their trust entitlement to the franked distributions (the total of the credits shown at D in the statement of distribution at this item).

If the shares or interests are not held at risk as required under the holding period and related payments rules, or there is other manipulation of the imputation system, do not include the relevant franking credits here or at D in the statement of distribution at this item.

The amounts shown at A and B under any calculation method may be different from the primary production and non-primary production income actually distributed to the beneficiary, or which they were entitled to receive from the trust.

If the trust made a loss from its primary production or non-primary production activities, print L in the box after the amount. The total of the amounts shown at N, A, B, U, F, G and H should be a positive amount, because trusts cannot distribute losses.

Beneficiaries of primary production trusts that report a loss

Eligible primary producer beneficiaries can access income averaging and hold a farm management deposit in years even where a primary production trust reports a loss for trust purposes.

What you are required to show at A Primary production will depend on the type of trust that has made the loss for trust purposes.

Fixed trusts

If the trust is a fixed trust, all the eligible beneficiaries are able to access income averaging and hold farm management deposit.

Discretionary trusts

If the trust is a discretionary trust, the trustee will need to choose those beneficiaries who will still be eligible for the concessions.

Trustees may choose beneficiaries who will be eligible for income averaging or hold farm management deposits.

The trustee's choices must be:

made in writing
signed by both the trustee and the beneficiary
made by the time that the trust return is lodged (unless the Commissioner allows a later time).

The trustee may choose the greater of:

12 beneficiaries, or
the number of primary producer beneficiaries chosen in the previous income year.

How to complete A Primary production

Show '0' at A Primary production for each eligible beneficiary, that is:

all fixed trust beneficiaries
each chosen discretionary trust beneficiary eligible for income averaging.

If as a result of the trustee's choices, a primary producer is eligible to access farm management deposits but is not eligible for income averaging, do not show anything at A Primary production for that beneficiary.

See also:

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.

Franked distributions U

Show each beneficiary's share of franked distributions, to the extent they formed part of the net income of the trust for tax purposes, at U. The amount shown at U also includes the beneficiary's share of attached franking credits (the franking credit 'gross-up').

Trusts which have not made beneficiaries (or the trustee) specifically entitled to franked distributions or capital gains generally work out a beneficiary's share of the franked distributions by multiplying the total amount of the trust's franked distributions (and any attached franking credits) to the extent to which those distributions formed part of the net income of the trust estate for tax purposes by the beneficiary's percentage share of the trust income. Show whole dollars only.

For relevant trusts with capital gains or franked distributions that any beneficiary (or the trustee) is specifically entitled to in full or in part, the amount shown at U in respect of a beneficiary should generally include:

the amount of the net franked distributions that the beneficiary is specifically entitled (net franked distributions are determined by reducing the franked distributions by expenses that are directly relevant to them), to the extent that those distributions formed part of the net income of the trust estate for tax purposes, plus any attached franking credits, plus
the beneficiary's adjusted Division 6 percentage share of any net franked distributions of the trust that no beneficiary is specifically entitled to the extent that those distributions formed part of the net income of the trust estate for tax purposes, plus that same share of any attached franking credits.

See also:

Technical update

Whilst dividends from a New Zealand franking company are taken into account when calculating a beneficiary's share of franked distributions, the New Zealand franking company dividend amount (and associated franking credits) should not be included at U. The New Zealand franking company dividend amount should be shown at H Other assessable foreign source income.

The total amount of franking credits (the franking credit 'gross-up') included at this label for a beneficiary would generally equal the total of the credits shown at D at this item.

For managed investment trusts that have not elected to apply the new streaming changes, the amount at U Franked distribution will also be required to be worked out differently if the MIT received any franked distributions (either directly or indirectly via a partnership or another trust), during the income year. For each beneficiary:

multiply the non-primary production income by the beneficiary's percentage share of the trust's income
subtract the beneficiary's proportionate share of franking credits included in the trust's net income (calculated as an amount equal to the total franking credits included in the trust's net income (at D item 8, and at M item 12) multiplied by the beneficiary's percentage share of the trust income), and
add the beneficiary's share of franking credits that reflect their trust entitlement to the franked distributions (the total of the credits shown at D in the statement of distribution).

Franking credit D

For trusts that did not make any beneficiary (or the trustee) specifically entitled to any franked distributions or capital gains, the amount shown at D is worked out by multiplying the total franking credits included in the trust's net income (at D item 8, M item 12) multiplied by the beneficiary's percentage share of the trust income.

The amount shown at D will need to be worked out differently if the trust:

is a relevant trust with capital gains or franked distributions that any beneficiary (or the trustee) is specifically entitled to in full or in part, or
is a managed investment trust (MIT) that has not elected to apply the new streaming provisions.

For relevant trusts with capital gains or franked distributions that any beneficiary (or the trustee) is specifically entitled to in full or in part, the amount shown at D in respect of a beneficiary should include:

any franking credits attaching to franked distributions to which the beneficiary is specifically entitled, to the extent to which those distributions formed part of the net income of the trust estate for tax purposes, plus
the beneficiary's adjusted Division 6 percentage share of any franking credits attaching to any part of the franked distributions forming part of the net income of the trust estate, to which no beneficiary is specifically entitled.

For MITs that have not elected to apply the new streaming changes, show at D each beneficiary’s share of franking credits for franked distributions received by the trust (including dividends flowing to the trust via a partnership or another trust).

A beneficiary's share of the franking credit on a franked distribution will depend on their entitlement to the distribution, having regard to the trust deed and any relevant trustee resolution. To work out the beneficiary's entitlement to the franked distribution where it has come via one or more trusts or partnership, you will need to work out the entitlements to the franked distribution of each interposed entity through which the dividend flowed.
If only some of the beneficiaries to whom the income of the trust has been distributed are entitled to benefit from the franked distribution, then only those beneficiaries will have a share of the franking credits. To work out a beneficiary's share, express their entitlement to the franked distribution as a percentage of the total franked distribution. Multiply the result by the amount of franking credits on that dividend.
Show '0' at D for any other beneficiary who is presently entitled to a share of the trust's distributable income but that entitlement does not comprise or include the franked dividend.

If the trustee is assessable on a part of the net income under section 99 or 99A, the trustee may have a share of the franking credit on the dividend. To work out the trustee's entitlement, express that part of the dividend in respect of which no beneficiary has an entitlement as a percentage of the total dividend. Multiply the result by the amount of the franking credit on that dividend at D under Income to which no beneficiary is presently entitled at the end of item 54.

The total of D amounts for each completed statement of distribution must equal the sum of franking credits claimed at:

D Share of franking credits from franked distributions item 8
M Franking credit item 12.

Amounts shown at N are not included at D Franking credits.

See also:

TFN amount withheld E

Show each beneficiary’s share of credit for amounts withheld from payments of interest, dividends and unit trust distributions by investment bodies because the recipient did not quote a TFN.

If there is trust income to which no beneficiary is presently entitled, show that share of the credit for the TFN amounts withheld at E under Income to which no beneficiary is presently entitled at the end of item 54.

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

The total of E amounts for each completed statement of distribution must equal the sum of TFN amounts withheld on interest, dividends and unit trust distributions at:

E Share of credit for TFN amounts withheld from interest, dividends and unit trust distributions item 8
I TFN amounts withheld from gross interest item 11
N TFN amounts withheld from dividends item 12.

Share of credit for TFN amounts withheld from payments from closely held trusts O

Show at O each beneficiary's share of credit for any amount withheld by the trustee of a closely held trust from a distribution made to you as a trustee beneficiary, because a TFN was not provided.

If there is trust income to which no beneficiary is presently entitled, show that share of the credit for the TFN amounts withheld from payments from closely held trusts at O 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 O under Income to which no beneficiary is presently entitled at the end of item 54.

The total of O amounts for each completed statement of distribution must equal the sum of TFN amounts withheld on closely held trust distributions shown at O item 8 Partnerships and trusts in the trust return.

Do not show at O any amounts you have withheld, as the trustee of a closely held trust, from payments or distributions where the beneficiary has not provided their TFN to you. These should be reported at T Total TFN amounts withheld from payments.

For more information about the TFN withholding rules for closely held trusts, see TFN withholding for closely held trusts.

Capital gains F

Show at F each beneficiary’s share of the trust's capital gains. Show whole dollars only.

Legislation has been enacted that makes changes to allow the streaming of franked distributions and capital gains to beneficiaries for tax purposes. The amendments apply from the 2010–11 income year and introduced the concept of specific entitlement that broadly ensures that a beneficiary, (or trustee assessed on behalf of a beneficiary), that has been 'streamed' a capital gain by the trustee and will receive the benefits of that gain, is assessed on so much of that capital gain as is included in the net income of the trust. Similar rules apply in respect of any franked distributions of the trust.

These law changes do not apply to managed investment trusts (MIT) unless they choose for them to apply.

For trusts subject to these rules, the amount shown at F is the sum of beneficiary's share of capital gains that the beneficiary is specifically entitled, to the extent that it forms part of the net income of the trust estate for tax purpose, plus the beneficiary's adjusted Division 6 percentage share of any capital gains that no beneficiary is specifically entitled, to the extent they form part of the net income of the trust.

For MITs that have not elected to apply the streaming changes, the amount shown at F is determined by multiplying the beneficiary's percentage share of the income of the trust by the trust's capital gains.

If there is trust income to which no beneficiary is presently entitled, show that share of the trust's capital gains at F under Income to which no beneficiary is presently entitled at the end of item 54.

The legislation that provides for the streaming of capital gains and franked distributions for tax purposes includes an option for eligible trustees to choose to be assessed on capital gains of the trust in certain circumstances. If this option applies, show that share of the trust's capital gains at Y under Choice for resident trustee to be assessed to capital gains on behalf of beneficiaries at item 55. Capital gains under which this choice has been made should only be shown at item 55 and should not be shown at F item 54 for each relevant beneficiary.

Show at F each beneficiary’s share of the trust's capital gains in whole dollars only.

See also:

Technical update

To help a trustee record the information required, see worksheet 5.

The total amounts at F from all completed statements of distribution, plus the amount at Y item 55, would generally equal the amount at A Net capital gain item 21 unless the trust has deductible expenses or revenue losses that have properly been applied against the net capital gain in working out the net income of the trust. To complete their own tax returns and meet their capital gains tax obligations, beneficiaries will need the following information:

a dissection of their share of the trust's net capital gain according to
- capital gains from collectables and all other capital gains
- whether capital losses have been applied against a capital gain
- whether any capital gains are discount capital gains
- whether any capital gains have been reduced by the small business 50% reduction and/or any of the other small business CGT concessions
- details of the amount and type of any capital gains that they are specifically entitled to
details of any non-assessable payment made in the income year in respect of an interest in the trust (CGT event E4 section 104-70 of the ITAA 1997). The details should indicate the extent to which the payment is attributable to each of the following
- tax-exempted amounts, subsection 104-71(1) of the ITAA 1997
- tax-free amounts, subsection 104-71(3) of the ITAA 1997
- CGT concession amounts, subsection 104-71(4) of the ITAA 1997
- tax-deferred amounts, associated with the small business 50% active asset reduction, frozen indexation, building allowance and accounting difference in income
- details of any capital gains on which the trustee has chosen to be assessed on behalf of a beneficiary to ensure that the beneficiary is not assessed on this amount.

See also:

Attributed foreign income G

Show each beneficiary’s share of attributed foreign income included in the net income of the trust in whole dollars only. Except for relevant trusts that have made beneficiaries specifically entitled to amounts of franked distributions or capital gains, this amount is generally worked out by multiplying a beneficiary's percentage share of trust income by the total attributed foreign income of the trust.

For trusts which have made beneficiaries specifically entitled to franked distributions or capital gains, you generally work out a beneficiary's share of attributed foreign income by multiplying the total attributed foreign income of the trust 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 trust's attributed foreign income at G under Income to which no beneficiary is presently entitled at the end of item 54.

The total amounts at G from all completed statements of distribution must equal the sum of any attributed foreign income shown at item 22 Attributed foreign income on the trust tax return.

If the beneficiary was not a resident of Australia at any time during the income year, see Non-resident beneficiaries.

Other assessable foreign source income H

Show each beneficiary’s share of other assessable net foreign source income included in the net income of the trust for tax purposes. Except for relevant trusts that have made beneficiaries specifically entitled to amounts of franked distributions or capital gains, this amount is generally worked out by multiplying a beneficiary's percentage share of trust income by the total of the trust's other assessable net foreign source income.

For trusts that have made beneficiaries specifically entitled to franked distributions or capital gains, you generally work out a beneficiary's share of assessable net foreign source income by multiplying the total of the trust's other assessable net foreign source income by their adjusted Division 6 percentage share. Show whole dollars only.

The total amounts at H from all completed statements of distribution must equal the amount of net foreign source income shown at V Net item 23 on the trust tax return.

If the beneficiary was not a resident of Australia at any time during the income year, see Non-resident beneficiaries.

Foreign income tax offset I

Show each beneficiary’s share of foreign income tax offsets at I.

Except for relevant trusts that have made beneficiaries specifically entitled to amounts of franked distributions or capital gains, this amount is worked out by multiplying a beneficiary's percentage share of trust income by the total of the trust's foreign income tax offsets.

For trusts which have made beneficiaries specifically entitled to franked distributions or capital gains, you generally work out a beneficiary's share of assessable net foreign source income by multiplying the total of the trust's other assessable net foreign source income by their adjusted Division 6 percentage share.

If there is trust income to which no beneficiary is presently entitled, show that share of the trust's foreign income tax offset at I under Income to which no beneficiary is presently entitled at the end of item 54.

The total amounts at I from all completed statements of distribution must equal the amount of foreign income tax offsets shown at Z Foreign income tax offset item 23 on the trust tax return.

Share of National Rental Affordability Scheme tax offset R

Show each beneficiary’s share of the NRAS tax offset: include cents.

A beneficiary's share of the NRAS tax offset will depend on their entitlement to the NRAS rent derived by the trustee (or flowing to the trustee via a partnership or another trust) having regard to the trust deed and any relevant trustee resolution.

The beneficiary's entitlement to the NRAS rent is expressed as a percentage of the total NRAS rent derived from all rental dwellings covered by the certificate issued by the Secretary of the Department of Social Services. To work out the beneficiary's entitlement to the NRAS rent where it has come via one or more trusts or partnership, you will need to work out the entitlements to the NRAS rent of each interposed entity in the chain through which the amount flowed.

The beneficiary's percentage entitlement is then multiplied by the amount of the tax offset stated in the certificate relating to those dwellings (or in any amended certificate).

If only some of the beneficiaries to whom the income of the trust has been distributed are entitled to benefit from the NRAS rent, then only those beneficiaries will be entitled to the offset.

If the trustee is assessable on a part of the net income under section 99 or 99A, the trustee may be entitled to the NRAS offset. To work out the trustee's entitlement, express that part of the NRAS rent in respect of which no beneficiary has an entitlement as a percentage of the total NRAS rent derived from all rental dwellings covered by the certificate. Multiply the result by the amount of the tax offset stated in the certificate at R under Income to which no beneficiary is presently entitled at the end of item 54.

A trustee may also be entitled to the NRAS offset if the trust does not have any net income for the year; see section 380-20 of the ITAA 1997. Record the trustee's entitlement at R under Income to which no beneficiary is presently entitled at the end of item 54.

The total of the amounts shown at R for each completed statement of distribution must equal the amount of NRAS tax offset entitlement shown at F item 50 on the trust tax return: include cents.

Non-resident beneficiary additional information

Under Division 6 ITAA 1936, a trustee will be liable to pay tax in relation to:

shares of net income of a trust where non-resident companies and individual beneficiaries not being trustees are presently entitled to a share of the income of the trust; both these amounts are shown at J Non-resident beneficiary additional information subsection 98(3) assessable amount item 54
share of net income of a trust where a beneficiary who is presently entitled to the income of the trust is itself a trustee and is a non-resident at the end of the income year; these amounts are shown at K Non-resident beneficiary additional information subsection 98(4) assessable amount item 54.

Subsection 98(3) assessable amount

Non-resident company beneficiaries assessable amount J

If you have entered assessment calculation code 139 (non-resident company beneficiaries) at V, you must include an amount at J.

The amount to show at J is the amount the trustee is liable to pay tax on under section 98 of the ITAA 1936 on behalf of the corporate beneficiary who is a non-resident at the end of the income year: show whole dollars only.

The amount the trustee is liable to pay tax on is calculated as:

so much of the trust's net income that is attributable to a period (if any) that the corporate beneficiary was a resident multiplied by the beneficiary’s percentage share of the income of the trust, and
so much of the trust's net income that is attributable to Australian sources for the period the corporate beneficiary was a non-resident multiplied by the beneficiary’s percentage share of the income of the trust.

Do not include income from which foreign resident withholding tax has been withheld (such as unfranked dividends, interest and royalties, fully franked dividends or amounts on which managed investment trust withholding tax is payable). Do not include the capital gains for which the trustee is not liable to pay tax under Subdivision 855-A of the ITAA 1997.

If the corporate beneficiary's share of net income of the trust includes an amount that is attributable to a discounted capital gain made by the trust, work out the amount the trustee is liable to pay tax on under subsection 98(3) as if the part attributable to the capital gain was double the amount it actually is: see section 115–220 of the ITAA 1997. This ensures that a trustee assessed on behalf of a non-resident company beneficiary does not get the benefit of the CGT discount that the corporate beneficiary would not be entitled to if it were assessed. Show the net capital gain amount at F and the discount capital gain amount at J.

To work out whether the corporate beneficiary's share of the net income includes an amount that is attributable to a discounted capital gain of the trust, multiply the beneficiary's percentage share of the income of the trust by so much of that discounted capital gain that is reflected in the trust’s net capital gain, that is, after the application of any capital losses and net capital losses to that gain.

If the beneficiary is a non-resident at the end of the year and has not been a non-resident for the entire year, show clearly in a separate schedule full details of its share of the net income. It is important to provide the information set out at Non-resident beneficiaries so that the appropriate tax rates can be applied.

Non-resident individual beneficiaries assessable amount J

If you have entered assessment calculation code 138 (non-resident individual beneficiaries) at V, you must include an amount at J.

The amount to show at J is the amount the trustee is liable to pay tax on under section 98 of the ITAA 1936 on behalf of an individual beneficiary who is a non-resident at the end of the income year: show whole dollars only.

The amount assessed to the trustee is comprised of the beneficiary’s share of the net income from the trust that is attributable to a period (if any) that the beneficiary was a resident, as well as the beneficiary’s share of the trust's net income that is attributable to Australian sources for the period the beneficiary was a non-resident.

Do not include income subject to withholding tax (unfranked dividends, interest and royalties), fully franked dividends or amounts on which managed investment trust withholding tax is payable. Do not include any capital gains for which the trustee is not liable to pay tax under Subdivision 855-A of the ITAA 1997. All other Australian source income is included.

If the beneficiary is a non-resident at the end of the year, but has not been a non-resident for the entire year, you will have printed X in the Yes box at A item 29. It is important to provide the information set out at Non-resident beneficiaries so that the appropriate tax rates can be applied.

Subsection 98(4) assessable amount

Non-resident trustee beneficiaries assessable amount K

If you have entered assessment calculation code 140 (non-resident trustee beneficiary) at V, you must include an amount at K. Any amounts reported at K should not be included at P or Q (TB statement).

The amount to show at K is the amount the trustee is liable to pay tax on under section 98 of the ITAA 1936 because a trustee beneficiary, who is presently entitled to a share of the trust's distributable income, is a non-resident at the end of the income year: show whole dollars only.

The amount the trustee is liable to pay tax on is so much of the non-resident trustee beneficiary's share of the net income of the trust as is attributable to Australian sources. Do not include income subject to withholding tax (unfranked dividends, interest and royalties), fully franked dividends or amounts on which managed investment trust withholding tax is payable. Do not include any capital gains for which the trustee is not liable to pay tax under Subdivision 855-A of the ITAA 1997.

If the trustee beneficiary's share of net income of the trust includes an amount that is attributable to a discounted capital gain made by the trust, work out the amount the trustee is liable to pay tax on under subsection 98(4) as if the part attributable to the capital gain was double the amount it actually is: see section 115–220 of the ITAA 1997. This ensures that a trustee assessed on behalf of a non-resident trustee beneficiary does not get the benefit of the CGT discount that a corporate beneficiary would not be entitled to if it were assessed. Show the net capital gain amount at F and the discount capital gain amount at K.

To work out a non-resident trustee beneficiary's share of the net income that is attributable to a discounted capital gain of the trust multiply the beneficiary's percentage share of the income of the trust by so much of that discounted capital gain that is reflected in the trust’s net capital gain, that is, after the application of any capital losses and net capital losses to that gain.

If the beneficiary is a non-resident at the end of the year and has not been a non-resident for the entire year, show clearly in a separate schedule full details of its share of the net income. It is important to provide the information set out at Non-resident beneficiaries so that the appropriate tax rates can be applied.

Trustee beneficiary (TB) statement information

There are reporting obligations that apply to certain distributions to trustee beneficiaries of a closely held trust (that is not an excluded trust) within the meaning of section 102UC of the ITAA 1936 (the trustee beneficiary reporting rules). Appendix 11 contains information about what constitutes a closely held trust and an excluded trust for these purposes. If you are making a distribution to another trust, you should read appendix 11 before completing this section.

Failure to meet these reporting obligations may result in a liability for trustee beneficiary non-disclosure tax, currently imposed at a rate of 49%

This section is to be completed by all closely held trusts that have an obligation under the trustee beneficiary reporting rules. You do not need to complete this section if you are not the trustee of a closely held trust or if you are the trustee of an excluded trust for the purposes of the trustee beneficiary reporting rules.

If you are not making a TB statement for the trustee beneficiary, print X in the No box. A TB statement is not required where the trustee beneficiary was not presently entitled to tax-preferred amounts and its share of the trust's net income does not include an untaxed part.

If you are making a TB statement, print X in the Yes box for this trustee beneficiary, and then:

for resident beneficiaries, ensure the name and TFN of the trustee beneficiary is recorded in the beneficiary details section
for non-resident beneficiaries, ensure the name and address of the trustee beneficiary is recorded in the beneficiary details section
at P show any tax-preferred amounts to which the trustee beneficiary is presently entitled; if there are no tax-preferred amounts, show a zero at P
at Q show any untaxed part of a share of net income of the trustee beneficiary; if there is no untaxed part of a share of net income, show a zero at Q.

For more information about the definitions of tax-preferred amounts and untaxed part of a share of net income, see appendix 11.

Annual trustee payment report information

This section is to be completed by all closely held trusts (including family trusts) which are subject to the TFN withholding rules for closely held trusts that have:

made payments during the income year, or
withheld amounts from payments made to beneficiaries.

The definition of an excluded trust for the purposes of the TFN withholding rules differs from the definition of an excluded trust for the purposes of the trustee beneficiary reporting rules. See appendix 11 for more information.

Show an amount at S where you have made one or more distributions during the income year (not as a result of determining present entitlement at year end) that are wholly or partly from the ordinary or statutory income of the trust for that year and the total of those distributions exceeds the beneficiary's share of the net income of the trust shown at item 54. Only include at S the amount by which these distributions made during the income year exceed the beneficiary's share of the net income.

If the only distributions of ordinary or statutory income made by the trust are as result of determining present entitlement at year end, show nothing at S. In these cases, an amount will generally be shown at W item 54.

Show at T the amounts withheld from all payments or distributions to the beneficiary where the beneficiary's TFN was not provided to you. This includes amounts withheld from payments during the year or as a result of determining present entitlement at the end of the year. Do not show at T the beneficiary's share of amounts that were reported at O item 8, these are included at O item 54.

For more information about the TFN Withholding Rules for closely held trusts, see appendix 11.

Information that non-residents must provide on the TB statement

A non-resident beneficiary who received income from Australian government allowances and payments or Australian government pensions and allowances (reported at item 14 Other income and distributed to the beneficiary at Share of income label B Non-primary production) must provide this information on the TB statement.

A non-resident beneficiary who received an Australian government pension or allowance will be taxed at resident tax rates. The non-resident beneficiary remains ineligible for resident tax offsets and benefits, and is exempt from the Medicare levy and the Medicare levy surcharge. On the TB statement, record:

non-residency status
the total amount received by the beneficiary of any Australian Government allowances and payments like Newstart, Youth Allowance and Austudy; see item 5 on the Tax return for individuals 2015
the total amount received by the beneficiary of any Australian Government pensions and allowances; see item 6 on the Tax return for individuals 2015.

55 Choice for resident trustee to be assessed to capital gains on behalf of beneficiaries

Commencing for the 2010–11 income year, the trustee of a resident trust may choose (if permitted by the trust deed), to be assessed on a capital gain of the trust. This is allowed provided no beneficiary has received any amount referable to the gain during the income year or within two months of the end of the income year. The choice must be made in respect of the whole capital gain.

This is similar to (and replaces) the choice available to the trustee of a testamentary trust under the law prior to the 2010–11 amendments, but is not limited to those trustees. For example, the trustee will be able to make the choice if under the terms of the trust the income beneficiary cannot benefit from the capital gains. It is only the trustee that can make this choice.

If the trustee makes a choice in respect of a capital gain then:

the trustee will be assessed on the capital gain under section 99 or 99A of the ITAA 1936, as appropriate
the capital gain is not taken into account in working out any beneficiary's net capital gain for an income year.

You should include the amount of the capital gain for which the trustee is making this choice at Y. Where the trustee is making the choice in respect of more than one capital gain, you should show the total of all capital gains at Y.

Capital gains under which this choice has been made should only be shown at Y and should not be shown at F Capital gains in item 54 for the relevant beneficiary.

You will need to insert an assessment calculation code from appendix 12 at X as appropriate for your trust. The relevant codes are:

for inter vivos trusts
- 36 where the trustee is assessed under section 99A ITAA 1936
- 37 where the trustee is assessed under section 99 ITAA 1936
for deceased estates
- 15 where the trustee is assessed under section 99 ITAA 1936
- 16 where the trustee is assessed under section 99 ITAA 1936 without the tax-free threshold.

56 Beneficiary under legal disability who is presently entitled to income from another trust

Was any beneficiary in this trust, who was under a legal disability on 30 June 2015, also presently entitled to a share of the income of another trust? If yes, print X in the Yes box. If not, print X in the No box.

The trustee is liable to be assessed on the share of net income of the trust if a beneficiary is presently entitled to a share of the income of the trust but under a legal disability. Where the beneficiary is presently entitled to a share of the income from more than one trust, the beneficiary’s share of the net income from each of the trusts is taken into account in working out the tax rate to apply in the trustee’s assessment on behalf of the beneficiary. For more information on the tax rates and relieving provisions, see appendix 10.

Where the beneficiary is presently entitled to income from one or more other trusts, give the following information for each of those trusts:

name of the trust
trust TFN
income to which the beneficiary is presently entitled.

If a trustee is unable to provide any part of this information, they must provide all the available details together with the name and address of the parent or guardian of the beneficiary.

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