Trust Income Home Loans: Can You Use Trust Distributions?

A trust income home loan is common for business owners who trade through a family trust. Lenders regularly assess trust distributions, but the rules on what counts are more detailed than many borrowers expect.

If your income includes payments for caring for a child, see whether foster or kinship care payments can count as home loan income.

For a separate guide to borrowing through a trust, read can a unit or discretionary trust get a home loan.

It can be frustrating when your business is doing well but the income on your tax return looks lower, because the trust distributed some profit to a spouse, children or a company. Lenders may only count what was actually distributed to you, or they may allow some income to be redirected.

The answer depends on the lender, your role in the trust (trustee, beneficiary, director of the trustee company), how many years of financials you have, who received distributions and any related-party loans.

This guide explains how Australian lenders may assess trust distribution income for a home loan, based on lender policy wording we reviewed in October 2026.

Can you use trust distribution income for a home loan?

Yes, trust distributions may be used as income if the lender is satisfied that:

• you received the distribution, as shown on your individual tax return
• you are connected to the trust in a way the lender accepts, often as trustee and beneficiary, or as director and shareholder of the trustee company
• the trust has traded for long enough, often 2 years
• the trust is profitable and the income is likely to continue
• the trust’s tax returns, financials and distribution statements support the figures
• any trust debts and related-party loans have been included in the assessment

Related research: Can You Get a Home Loan in a Family Trust?

What is trust distribution income?

A trust does not usually pay tax on income it distributes. Instead, the trustee distributes income to beneficiaries each year, and each beneficiary declares their share on their own tax return. For a business run through a family trust, the owner’s “income” is often their distribution, plus any wage the trust pays them.

This page is general information about lending. It does not cover how distributions are taxed or how a trust should distribute. That is a matter for your accountant.

How do lenders assess trust income for a home loan?

Lenders broadly use one of two approaches:

• Distribution approach: the lender uses the distribution shown on your individual tax return, sometimes with add-backs from the trust’s accounts.
• Entity approach: the lender looks at the trust’s profit, applies add-backs and expenses trust debts, then allocates income based on your share.

ANZ’s wording, for example, says that where a company is trustee for a trust, the lender uses the distribution paid in the individual’s tax return, not the profit from the trust. Other lenders look at the trust’s own tax return, then apply your distribution percentage.

Why lenders treat trust income carefully

• Distributions can change every year. A discretionary trust can distribute differently each year, so lenders look for a stable pattern.
• Income may go to other people. Distributions to a spouse, children or a company are not your income unless the lender accepts redirection.
• Profit is not cash. A trust may distribute income it has not paid out in cash, or have loans to and from related parties.
• Losses and debts matter. Lenders usually include trust liabilities in servicing.

How do lender policies differ on trust distribution income?

We reviewed policy summaries for 40 Australian lenders (a mix of banks and non-banks) from a third-party broker policy tool, as at October 2026. This is a research sample of 40 lenders, not the whole market.

• 29 of the 40 lenders in our sample mention trusts in their self-employed income, simple self-employed, alt doc or add-back wording. 13 of the 40 refer specifically to trust distributions.
• 4 of the 40 require the borrower to be both trustee and beneficiary (or a closely linked spouse or company director). Auswide Bank and MyState accept trust income where applicants are both trustee and beneficiary, and St.George and Westpac, when assessing trust income using tax returns, confirm the customer has been a trustee and beneficiary for the last 2 full financial years.
• 1 of the 40 describes when distributions paid to someone else can be counted if the trustee would redirect them: ANZ requires a trustee undertaking and an accountant’s or solicitor’s confirmation.
• 3 of the 40 refer to adding back distributions to children: AMP, Assetline Capital and Macquarie.
• 5 of the 40 mention Division 7A loans, with different treatment (see below).
• 0 of the 40 mention unpaid present entitlements or bucket companies by name. That is no data, not a rule either way.

St.George and Westpac also list distributions from an unrelated entity, and trust or partnership distributions that have been redistributed, as unacceptable self-employed income.

These are examples of how differently lenders approach the same situation. They are not recommendations. Policies change often, so confirm the current position with a broker before you apply.

Policy summary as at October 2026, from a third-party broker policy tool (export dated 20 October 2026). The lender guides behind it are dated between February 2026 and October 2026 for the lenders named on this page. The sample counts on this page cover all 40 lenders, whose guides are dated between October 2025 and October 2026. For example, CBA's guide is dated 7 July 2026. Lender policies change often and may have changed since.

Do you need to be a trustee and a beneficiary?

Often. Several lenders want to see that you control the trust and receive income from it. Where the trustee is a company, lenders may require you to be a director and a minimum shareholder of that company, commonly 50%. Auswide Bank and MyState, for example, require borrowers to hold at least 50% of a corporate trustee that does not trade.

Can distributions to your spouse or children be counted?

Sometimes. A spouse who is a co-borrower can usually have their own distribution counted. Distributions to children are treated in different ways: some lenders allow distributions to children under 18 to be added back to the trust’s income, while AMP’s published broker policy, at the time of writing (October 2026), limits trust add-backs to distributions to the trustee (an individual or company), the trustee’s husband, wife or de facto partner, and the trustee’s dependent children.

Can you redirect trust distributions to yourself for a home loan?

In our sample, one lender describes a way to do it, with conditions. ANZ’s wording asks for a record of discussion, a declaration from the trustee and written confirmation from an accountant or solicitor that the borrower has the discretion to direct income to themselves. Where there is more than one trustee or director, ANZ requires a minimum 50% shareholding and all to sign.

How many years of trust income do lenders need?

Usually 2 years of tax returns and financials, though some lenders accept 1 year in limited cases. Auswide Bank and MyState, for example, allow single-year financials up to 80% LVR where there is one source of self-employed income, using the distribution shaded by 10%. Otherwise they use the 2-year average, or the latest year if it is lower.

Related research: Self-Employed Home Loans: Which Australian Lenders May Accept 1-Year Financials, 1-Year ABNs or Alt Doc Income?

What add-backs apply to trust income?

Common add-backs include depreciation, interest on loans being refinanced, one-off expenses and super above the compulsory rate. Which add-backs apply, and whether they can be used with the distribution approach, differs by lender. ANZ, for example, has one option using the distribution only with no add-backs, and another with add-backs that requires at least a 50% shareholding.

Related research: What Business Add-Backs Can Help Your Home Loan Application?

How are Division 7A loans treated?

Division 7A loans are loans from a private company to a shareholder or associate, often linked to trust structures through a corporate beneficiary. Lender treatment varies:

• St.George and Westpac include the customer’s Division 7A related party loans as commitments, and do not allow interest on a Division 7A loan as an add-back.
• CBA says Division 7A loans are not required to be included as a servicing commitment, and its servicing notes exclude Division 7A interest income and interest add-backs.
• Suncorp Bank describes compliant Division 7A loans as real debts that require repayment by the director.
• Athena includes certain director loans as a liability, using the ATO Division 7A benchmark interest rate.

The other 35 lenders have no Division 7A wording in our data.

Related research: Can Inter-Company Loans or Related-Entity Transfers Affect Finance Approval?

What about unpaid present entitlements and bucket companies?

An unpaid present entitlement arises when a beneficiary (often a company) is entitled to a distribution that has not been paid. None of the 40 lenders in our sample mention unpaid present entitlements or bucket companies by name. Lenders may still ask about them during assessment, especially if the financials show large amounts owing between related entities. Expect questions and be ready with your accountant’s explanation.

What documents do you need?

• your individual tax returns and notices of assessment
• the trust’s tax returns and financial statements
• trust distribution statements or minutes (CBA and Bankwest require distribution statements for trusts)
• company tax returns for a corporate trustee or beneficiary, if relevant
• the trust deed, if the lender asks for it
• details of related-party and Division 7A loans
• an accountant’s letter if income is being redirected

Can trust income be used for a low doc home loan?

Sometimes. Alt doc products rely on declarations and BAS or bank statements rather than tax returns, so distributions may not be assessed in the usual way. RedZed’s alt doc option using director salary credits, for example, excludes trust distributions. Other alt doc products may accept income from a trust’s business through BAS or an accountant’s letter.

Related research: Can You Get a Home Loan with Simple Self-Employed Verification?

10 common mistakes with trust distribution income

1. Assuming the trust’s profit is your income.
2. Not having lodged tax returns for the trust and yourself.
3. Distributing to others, then expecting the lender to count it as yours.
4. Not showing distribution statements or minutes.
5. Forgetting to disclose trust debts and related-party loans.
6. Changing the trustee or shareholding just before applying.
7. Relying on one strong year after a weak year.
8. Ignoring Division 7A loan repayments.
9. Overlooking a trust loss in the latest year.
10. Applying to a lender without checking its trust income rules.

How to improve your chances before applying

• Ask your accountant to finalise and lodge returns.
• Make sure distribution minutes are in order.
• Check who holds the shares in the trustee company.
• Gather details of all related-party loans.
• Discuss whether income may need to be redirected.
• Keep personal and trust finances separate.

Is it worth waiting for this year’s tax return?

Sometimes. If this year’s distribution is much higher and the return is nearly ready, waiting may increase the income a lender can count. If income has fallen, using the earlier year may not be possible, because many lenders use the lower of the latest year or the average.

Example scenarios

Scenario 1: Trustee and beneficiary for 5 years

A builder is the director of the trustee company and receives distributions each year. Lenders that accept trust income may count the distributions, subject to their rules on the borrower’s role, profitability and servicing.

Scenario 2: Distributions split with a spouse

A couple split distributions equally. If both apply together, each distribution may be counted. If only one applies, the other half may not count unless the lender accepts redirection.

Scenario 3: Distributions to a company beneficiary

A trust distributes to a company beneficiary. Lenders may ask how the company relates to the borrowers and whether any loans exist between the entities.

Scenario 4: Division 7A loan in the financials

The financials show a Division 7A loan to the director. Depending on the lender, the repayments may be counted as a commitment or left out of servicing.

So, can you use trust distribution income for a home loan?

Yes, you may be able to use trust distributions as income, but lenders differ on whose distributions count and how they are verified.

The strongest applications usually have:

• 2 years of lodged returns for you and the trust
• a clear role as trustee and beneficiary, or as director and shareholder of the trustee
• stable or rising distributions
• distribution statements that match the tax returns
• related-party loans disclosed and explained
• a lender whose policy accepts your trust income structure

Need help with a trust income home loan?

A Fundd mortgage broker can help you compare options and check whether current lender policies may suit your trust distribution income. We can review your tax returns, trust financials and structure with you and your accountant before you apply.