Income Splitting & Trust Distribution Calculator
Model splitting income with a spouse or family trust, with PCG 2021/4 risk-zone and s100A guardrails flagged for FY2026-27.
Australia has no simple codified 'you may shift X%' rule for spouse/family income splitting. The closest ATO guidance is PCG 2021/4 (allocation of professional-firm profits), which is a GATEWAY + three-factor RISK-ZONE framework, not a single percentage: it scores (a) the proportion of the whole-of-firm-group profit returned in the individual professional's own hands, (b) their total effective tax rate on income received from the firm, and (c) their remuneration as a % of the commercial benchmark for their role. Returning 100% of profit personally is automatically 'green zone'; splitting away from the individual moves the arrangement towards amber/red, especially if government-benchmarked deduction-shifting or circular financing features are present (the PCG's 'gateways'). For a sole-operator diverting income to a family trust for a spouse who does not genuinely work in the business, s100A (reimbursement agreements) is also a live risk, and PSI income specifically CANNOT be split at all (see deemedPayment). In the absence of one official ceiling number, maxSharePct=0.5 is used here as a conservative, commonly-cited practitioner rule of thumb (keep the professional's own share at or above half) — NOT an ATO-published threshold. Treat this figure as illustrative and flag the real multi-factor test in the UI.
Splitting income with a spouse or trust: the real rules
Australia doesn't have one codified 'you may shift X% of income' rule the way some other countries do. The closest official guidance, ATO Practical Compliance Guideline PCG 2021/4, is a gateway-plus-risk-zone framework for professional firms rather than a single percentage: it scores how much of the whole firm group's profit ends up in the individual professional's own hands, their overall effective tax rate on that income, and their remuneration against a commercial benchmark for the role. Returning 100% of profit personally sits in the automatic 'green zone'; moving away from that shifts an arrangement towards amber or red risk, especially where there's deduction-shifting or circular financing involved.
For a family trust distributing to a spouse who doesn't genuinely work in the business, section 100A reimbursement-agreement risk is a separate, real trap. And one thing is unambiguous: Personal Services Income specifically cannot be split at all — if the PSI rules apply, that income has to be attributed to the individual who performed the services, full stop.
What this calculator models
- A household income-splitting scenario against the PCG 2021/4 risk-zone factors
- A hard flag where income is PSI and therefore cannot be split
- A section 100A risk warning for trust distributions to a spouse who doesn't work in the business
- A comparison of household tax with and without the proposed split
