What’s New for Trusts: 2024–25 Tax Return Updates

Tax measures and form updates for the 2024–25 income year mean trusts need to review their deductions, schedules and reporting. Here’s a ready-to-paste overview of what’s changed in the 2025 Trust Tax Return instructions.

Small business – $20,000 instant asset write-off

The $20,000 instant asset write-off is extended to the 2024–25 income year for small business entities (turnover < $10 million). Eligible entities can immediately deduct the business-use portion of each depreciating asset costing under $20,000, first used or installed between 1 July 2024 and 30 June 2025. The 5-year lock-out rule is suspended until 30 June 2025.

• Where to claim: Item 5 – label K (Depreciation expenses) and Item 51 – label A (Deduction for certain assets).

Debt deduction creation rules (DDCR)

From 1 July 2024, the new debt deduction creation rules (DDCR) in subdivision 820-EAA ITAA 1997 disallow certain related-party debt deductions for multinational groups.

• Affected entities: Businesses operating in Australia and at least one other jurisdiction, with related-party debt arrangements.
• Exemptions: Entities (and associates) with ≤ $2 million of debt deductions per year; securitisation vehicles; certain SPEs; plantation forestry entities; ADIs.
• Where to report: Answer “Yes” at Item 29 – label O, and attach the International dealings schedule 2025.

Housing tax incentives – build to rent developments

From 1 January 2025, eligible large-scale build-to-rent projects can access:

• Accelerated 4% p.a. capital works depreciation
• 15% concessional final withholding tax on eligible distributions

Eligibility criteria: ≥ 50 dwellings, ≥ 10% affordable housing, single owner, construction commenced after 9 May 2023. Incentives must be held for at least 15 years or face a misuse tax claw-back.

• Where to claim: Item 9 – label X (Capital works deduction); label Y (Build to rent capital works deduction at 4%).

Reducing the use of cheques for tax refunds

The ATO may now retain certain refunds or credits for up to 90 days if valid Australian financial institution details are not supplied.

• Avoid delays: Ensure your trust’s bank details are accurate on the return.
• Notification: The ATO will contact you by letter, email or myGov message if a refund is held.

Changes to the Trust tax return 2025

The 2025 form includes new, changed and removed labels:

• New items/labels:
  – Managed investment trusts – “Is the trust a Withholding MIT?”
  – Managed investment trusts – “Is the trust a stapled MIT?”
  – Item 9 – label Y: Build to rent capital works deduction at 4%.
• Changed items/labels:
  – Managed investment trusts – MIT type (additional codes)
  – Item 22 – label S: “Did you have branch operations in Australia or overseas, or a direct or indirect interest in a foreign trust, foreign company, CFE or transferor trust?”
  – Item 29 – label O: “Were the thin capitalisation or debt deduction creation rules applicable to you?”
• Removed labels:
  – Item 52 Small business bonus deductions: label C (Small business energy incentive), label A (Small business skills and training boost)

For full instructions, continue to the ATO’s Trust Tax Return 2025 Instructions.