The 30 June trust resolution rush is now seven weeks away. The ATO has been signalling a more rigorous approach to trust distributions for two years. The 2026 resolution season is the first where the practical effect of the recent guidance is going to be tested at scale. Advisers are tightening their drafting accordingly.

The Section 100A focus has not gone away

The ATO’s Section 100A guidance from 2022 onwards has continued to be applied through audit activity. The reimbursement agreement concept that sits at the centre of the guidance is being interpreted broadly. Distributions where the entitlement is not paid in cash, or is paid in a way that benefits a different person to the named beneficiary, are getting scrutinised.

The drafting response for 2026 is to be specific about the entitlement, the distribution mechanism, and the actual flow of funds. Advisers who were comfortable with looser drafting two years ago are tightening.

The unpaid present entitlement issue

UPEs to corporate beneficiaries continue to attract attention. The TD 2022/11 framework treating UPEs from trusts to corporate beneficiaries as Division 7A loans is being applied actively. Advisers are reviewing existing UPE balances and either repaying them within the relevant period or formalising them as compliant loans.

The 2026 resolutions should be drafted with a clear plan for how any corporate UPE will be managed. Resolutions that create UPEs to corporates without a plan are accumulating risk for the trust.

Streaming and franking credits

The streaming provisions for franking credits and capital gains remain available but require careful execution. The deed must permit streaming. The resolution must clearly identify the streamed amounts. The beneficiary receiving the streamed amounts must be identifiable at the streaming point.

Advisers are getting more particular about deed reviews. Older deeds that pre-date the current streaming framework may not support the streaming intended.

The trustee resolution drafting checklist

A well-drafted 2026 resolution includes the trust name and date, the financial year, the identification of beneficiaries by reference to the deed, the specific allocation of categories of income, the specific allocation of streamed amounts, the resolution to pay or appropriate amounts, and the signatures of trustees.

The temptation to copy last year’s resolution without review is real and dangerous. Each year’s resolution should be reviewed against the current beneficiary circumstances and the current legal framework.

What is happening on the ground

The advisory firms that have prepared for the 2026 resolution season have already begun the conversations with their trust clients. The deed reviews, the beneficiary status confirmations, the UPE position reviews — these are being done in May, not June.

The firms doing the resolutions in the last week of June are the ones who will produce the disputes that the auditors review the following year. The pattern is familiar and the consequences are predictable.

A note on family trusts with regular distributions

Family trusts that have followed the same distribution pattern for many years should not assume the 2026 resolution can follow the same template. The ATO’s compliance posture has shifted. The drafting that was acceptable in 2018 is not necessarily acceptable in 2026.

Review the resolutions. Update them. The cost of the review is trivial relative to the cost of an audit-driven amendment.