Tax time trust account discussions
1. Get informed
Send your accountant a link to our Trust accounts webpages.
With high-level summaries, through to detailed step-by-step guides for trust accounting practice, you’ll find the information needed to understand the trust account framework and its requirements.
2. Financial health check
Trust accounts work by ‘quarantining’ project payments. All the money received from a principal for a project must only go into the trust account for that project, and subcontractors must only be paid from this account. Retention trust accounts keep all cash retentions separate from your main bank account.
Do you need to consider how you will adapt your strategies for working capital and cash flow to cope with these requirements?
3. Software compliance
There is work currently being done by the Department of Housing, Local Government and Planning and Public Works to clarify the trust accounting record keeping requirements with a range of software providers to bring confidence to software solutions.
It is expected software will progressively become available in the market from September 2024, with the majority of common software platforms having solutions by early 2025.
If think you will be required to open a trust account and administer a trust account ledger in the next phases of framework rollout you need to consider your software options.
4. Delegate your trust account
If you don't have an in-house accountant you might want to consider your outsourcing options, to help you stay on top of the record-keeping and notification requirements for trust accounts.
5. Keep up to date
The trust account framework has two more phases:
- 1 March 2025, trust accounts will apply to all eligible construction projects of $3 million or more.
- 1 October 2025, trust accounts will apply to all eligible construction projects of $1 million or more and to retention trust accounts throughout the contractual chain.
You can find regularly updated guidance materials and information for the framework rollout on our website at: Trust accounts.