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Three SMSFs purchased units in a unit trust and received 1 unit each. The unit trust then purchased a new building. The Trust then claimed GST on the building purchase. The GST refund is sitting in the trusts bank account and the Trust wants to pay this to the unit holders as a return of capital or a tax deferred distribution. Is there any problems with doing this from an audit prespective ?
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Hi Brian
The Trustee of the Trust should review the Trust Deed to see if they can do a return of capital.
There would be no issues from an audit perspective if the Trust's trust deed allows it.
Thanks
SMSF AAA