Taxpartna
Trust distribution review checklist

Trust distribution review checklist for Australian accounting firms

Trust distributions carry a high concentration of review risk. A resolution that does not match the deed, an entitlement that does not agree to the accounts, or a beneficiary who is not entitled under the deed can all change the outcome. This checklist sets out what an Australian accounting firm can work through when reviewing the trust distribution aspects of a completed file before sign-off.

It is a review and documentation checklist. The interpretation of the deed and the final conclusion remain matters for the registered tax practitioner.

Published 11 August 2026. Last reviewed 11 August 2026. Technically reviewed by the Taxpartna tax team.

Reviewing a trust distribution is a document-comparison task as much as a technical one. The trust deed, the distribution resolution, the financial statements and the tax return all need to tell the same story. Where they do not, the difference needs to be understood before sign-off. This checklist is organised around confirming that consistency.

For the wider file review that surrounds this area, see our tax return review checklist.

Trust distribution review checklist

Work through the following areas. Each is a prompt to check the file, not a step that reaches the conclusion for you.

Trust deed and eligible beneficiaries

  • A copy of the trust deed, and any amendments, is on the file.
  • The beneficiaries receiving distributions are within the class of eligible beneficiaries under the deed.
  • Any definitions in the deed that affect who can be distributed to have been considered.
  • Where the deed has been amended, the amendments are valid and reflected in the review.

Distribution resolution

  • A signed distribution resolution is on the file.
  • The resolution was made within the time required.
  • The resolution is consistent with the powers in the deed.
  • The percentages or amounts in the resolution are clear and unambiguous.

Entitlements and the accounts

  • The entitlements in the resolution agree to the financial statements.
  • Beneficiary entitlement accounts agree to the amounts distributed.
  • The trust's distributable income and its net income for tax purposes have been distinguished where relevant.
  • Any difference between accounting income and taxable income has been considered in the distribution.

Streaming of capital gains and franked distributions

  • Where capital gains or franked distributions are streamed, the deed permits it and the resolution supports it.
  • The records needed to support streaming to specific beneficiaries are present.
  • Franking credits attached to distributed franked income are supported.

Related-party and Division 7A interactions

  • Distributions to corporate beneficiaries have been identified.
  • Any unpaid present entitlements owed to a company have been flagged for the practitioner's Division 7A consideration. See our Division 7A review checklist.
  • Distributions to related trusts and individuals have been reviewed for consistency with prior years.

Supporting documentation and missing information

  • Supporting documentation for each material distribution is on the file.
  • Any missing information has been listed and requested.
  • Prior-year distribution patterns have been compared for unexplained changes.

Reviewer queries and final professional review

  • Reviewer queries are recorded on the file.
  • Matters requiring practitioner assessment are clearly marked.
  • The final professional review and conclusion on the distribution are documented.

Where Taxpartna fits into the trust distribution review

A checklist defines what should be considered. Comparing the resolution against the accounts, and confirming an entitlement agrees across several documents, is repetitive work that suits software support. Taxpartna augments this process by helping locate, compare and organise the relevant information in the actual file for practitioner assessment.

It combines AI-assisted document analysis, Australian AI tax software expertise and deterministic computer logic for defined comparisons. Taxpartna surfaces potential issues, such as an entitlement that does not agree between documents, for the practitioner to assess. Interpreting the deed and reaching the conclusion remain the responsibility of the registered tax practitioner.

Related tax review resources

Frequently asked questions

It is a structured list of the matters a tax practitioner works through when reviewing how a trust's income has been distributed for the year, before sign-off. It covers the deed, the resolution, the entitlements recorded in the accounts, and the supporting documentation for each beneficiary.

Common issues include a distribution resolution that does not align with the trust deed, entitlements that do not agree between the resolution and the financial statements, distributions to beneficiaries who are not eligible under the deed, resolutions made after the required time, and streaming of capital gains or franked distributions that is not properly supported.

No. Taxpartna assists by locating relevant documents and comparing figures across the file, and it surfaces potential issues for the practitioner to assess. Interpreting the deed and reaching the final conclusion are matters for the registered tax practitioner.

The distribution resolution generally needs to be in place by the end of the income year, so much of the review of the resolution itself is best done before year end. The review described here is the file review carried out when the return is prepared, confirming the documentation supports the position taken.

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This page provides general information about reviewing trust distributions and about the Taxpartna platform. It does not constitute tax, legal or professional advice. Taxpartna is a quality assurance assistance tool designed for use by registered tax practitioners. Taxpartna does not provide tax advice, tax agent services or BAS agent services, and does not interpret trust deeds. All professional judgements and sign-off decisions remain the responsibility of the registered tax practitioner.