Private ruling: GST and a cash distribution from a trust
Date of advice: 7 November 2018
Published: January 2019
Ruling period: 1 July 20XX to 30 June 20XX

Ruling: Q1: Are you, as a beneficiary of a family trust, liable to pay GST on the cash distribution you received from the trust? | A1: No. You are not liable to pay GST on the cash distribution you received as a beneficiary of the family trust because a cash distribution from a trust is not regarded as consideration for a supply by a beneficiary to the trust.

Relevant facts and circumstances: You are registered for GST from 1 July 20XX and a beneficiary of a family trust. In the financial years 20XX and 20XX, you received a cash distribution from the family trust.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 sections 9-40, 9-5, 40-5

Reasons for decision: Summary: Section 9-40 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that an entity must pay GST on any taxable supply that it makes. Section 9-5 of the GST Act provides, amongst other things, that an entity makes a taxable supply if the entity makes a supply for consideration. However, a supply is not a taxable supply to the extent that it is GST-free or input taxed. Section 40-5 of the GST Act provides that a financial supply is input taxed. The Commissioner has set out his views on the GST treatment of financial supplies in Goods and Services Tax Ruling GSTR 2002/2. At line D17 in Schedule 2 of GSTR 2002/2, it states that cash distributions from a trust are not subject to GST because there is no provision, acquisition or disposal of an interest in such transactions. A cash distribution from a trust is not regarded as consideration for a supply that a beneficiary makes to the trust. | Detailed Reasoning - Application of the law to your case: You received a cash distribution from the family trust in the financial years 20XX and 20XX. The cash distribution you received is not consideration for a supply that you make. As such, you are not making a taxable supply and are not liable to pay GST on the cash distribution you received.