The EOFY Decision You Can’t Delay: Director Fees & Trust Moves You Must Make in 2025

For business owners, directors, and trustees, the end of financial year isn’t just a paperwork deadline it’s your final chance to protect your income, optimise your tax position, and stay compliant.

💼The EOFY Reality Check: Why You Can’t Leave It to Your Accountant

June 30 is the invisible finish line many business owners stumble across not sprint through. While your accountant plays a crucial role in filing and lodging, key decisions around director fees and trust resolutions need to be made before EOFY hits, or you could be facing unnecessary tax liabilities, compliance risks, and lost opportunities.

This guide explains, in plain English, exactly what you need to do in 2025 when it comes to:

• Declaring Director Fees

• Signing Trust Resolutions

• Avoiding default tax rates and ATO scrutiny

Let’s break it down.

💸 Director Fees 101: What Counts and When It Matters

If it’s not documented, it didn’t happen (in the eyes of the ATO).

A director’s fee is any payment made to a company director for their services or efforts—not necessarily a salary, but a separate entitlement.

But here’s the catch: just planning to pay a director is enough to trigger ATO expectations.

🧾 Declaring Director Fees Before June 30

If your company plans to pay a director fee—even if it hasn’t been physically paid yet—it needs to be:

• Declared as income by the director

• Included in the company’s accounting and reporting

Failing to minute this before EOFY can result in the ATO treating it as unreported income—which means penalties, backdated tax, and interest charges.

⏱️ Tip: Timing Is Everything

The ATO uses an accrual basis for company accounting, so even if funds are transferred later, the decision to pay fees must be made and recorded by June 30.

🏦 What About Trusts? Why Trust Declarations Are EOFY Time Bombs

One missed signature can trigger a 47% tax rate.

If you operate with a discretionary trust, you must sign a trust distribution resolution before midnight on June 30. This document tells the ATO who receives the trust’s income—and how much.

🚨 What Happens If You Miss It?

Simple. The ATO will treat the trust income as undistributed and apply the top marginal tax rate of 47%. Even if your beneficiaries are entitled, without the resolution:

• You can’t prove entitlement

• You can’t distribute tax-efficiently

• You lose strategic control over trust profits

Many business owners mistakenly think they can “decide later” but EOFY is the final decision date, not the starting point.

🗂️ How to Prepare Trust Resolutions Correctly in 2025

Trust distribution resolutions must:

• Be in writing (verbal won’t count)

• Clearly name the beneficiaries and entitlements

• Be signed before midnight, June 30, 2025

• Be stored securely for at least 5 years

If your trust deed allows for default beneficiaries, the ATO may still apply penalties if no formal distribution is made. This is a common trap in family trusts that only operate informally.

Need Help Getting It Right?

👉 Click here to get your EOFY checklist and book a compliance check

Book Now

📋 What the ATO Wants to See in 2025

The ATO has sharpened its focus on closely held entities and related-party dealings, which means trust income and director fees are now audit hot zones. Here's what they're watching for:

• Unsubstantiated director payments

• Undocumented trust resolutions

• “Backdating” paperwork (an audit red flag)

• Tax schemes that divert income without legal basis

In 2025, transparency and timing are everything.

⚖️ Common EOFY Myths That Can Cost You

Let’s bust a few myths floating around the business community:

❌ Myth #1: “We’ll just decide the fees later.”

Fact: If you didn’t minute it before June 30, it’s not deductible until the next year—and you may lose strategic tax benefits.

❌ Myth #2: “My accountant handles the trust stuff.”

Fact: Trustees are legally responsible for trust distributions. Your accountant can prepare the documents, but only the trustee can sign them before EOFY.

❌ Myth #3: “We’re not paying director fees this year, so no need to record anything.”

Fact: Even the decision not to pay should be documented in the minutes for clarity and future-proofing.

✅ EOFY 2025 Action Checklist: Don’t Miss These

Use this as your quick compliance hit list:

Task	Deadline	Responsible
Minute any director fees	Before 30 June	Company Director / Secretary
Sign trust distribution resolution	Before 30 June	Trustee
Document non-payments (if applicable)	Before 30 June	Director / Trustee
File records securely	ASAP	Bookkeeper / Accountant
Lodge tax returns (post-June 30)	As per schedule	Accountant

💡 Pro Tip: EOFY Is a Strategy Window Not Just a Deadline

Done right, EOFY is more than compliance—it’s your chance to optimise tax and lock in smarter structures for next year.

Ask yourself:

• Can director fees help you smooth income across financial years?

• Can trust distributions reduce your overall group tax burden?

• Have you reviewed your trust deed in the last 3 years?

• Are your resolutions built around a strategy—not just tax minimisation?

EOFY isn’t just about checking boxes. It’s about setting up your next financial year for clarity, confidence, and growth.

🔗 Need Help Getting It Right?

EOFY paperwork can be confusing—but it doesn’t have to be risky.

At Profit Cloud, we connect you with trusted professionals, tools, and advice to simplify tax-time decisions and get your business compliant—without overwhelm.

👉 Click here to get your EOFY checklist and book a compliance check

Book Now

👀 Final Thought: Don’t Let the Clock Decide Your Tax

Too many business owners react to EOFY. The smartest ones plan ahead—and protect their income by acting before June 30.

Whether you're running a family trust, a small business, or a growing company, this is the moment to take control.

One document. One signature. One deadline. That’s all it takes to either save—or lose—thousands.

Let’s make sure EOFY 2025 works in your favour.