It is important to read Personal services income essentials on the ATO website.
If the trust receives an individual’s PSI other than in the course of conducting a personal services business and does not promptly pay it to the individual as salary or wages:
- the net amount of PSI is attributed to the individual and is not assessable to the trustee, and
- certain related expenses are not deductible under the special rules.
Answer Yes at at label N if the income of the trust includes an individual’s PSI. Otherwise, enter No.
If you answer No all the PSI labels will be closed to edit and the cursor will move to item 31.
If PSI is attributed to an individual, the income is not assessable to the trust and you must answer Yes at label N and complete all the relevant labels.
Include the PSI in the trust tax return as follows:
Include the attributed amount in the amount shown at label A–Income reconciliation adjustments item 5.
You can use the Reconciliation worksheet (Schedule A) to enter adjustments for PSI at the item 5: Reconciliation items. All amounts entered filter through to the relevant labels in the trust return. Refer to Schedule A Reconciliation
In the reconciliation statement, the attributed amounts are income subtraction amounts. If the income subtractions exceed the income add backs, the total is a negative amount and a /L show in the box to the right of label A on the tax return.
