Improving the taxation of trust income

[Terryw]

On 4 March 2011 the Govt released a discussion paper on "Improving the taxation of trust income"

see http://www.treasury.gov.au/document...er_Improving_the_taxation_of_trust_income.pdf

It looks like the Govt is going to amend the Tax Act concerning the definition of income and concerning the streaming of trust income.

After examining advice provided by the Board of Taxation (the Board), the Government has decided
to amend the law to:
• better align the key concept of ‘income of the trust estate’ (which has been interpreted to
mean distributable income) with the tax law concept of ‘net income of the trust estate’
(taxable income), so as to reduce anomalous outcomes and opportunities to manipulate tax
liabilities; and
• ensure that capital gains and franked distributions (including the attached franking credits) can
be streamed to particular beneficiaries.

 

[Mry]

On 4 March 2011 the Govt released a discussion paper on "Improving the taxation of trust income"

see http://www.treasury.gov.au/document...er_Improving_the_taxation_of_trust_income.pdf

It looks like the Govt is going to amend the Tax Act concerning the definition of income and concerning the streaming of trust income.

Its only been 10 years since we asked for a better definition of income.

The pollies accountants probably told them how much extra work would be involved in marrying the accounting, legal and taxation aspects of trust distributions and this was the easiest way around it. Now we just have to watch that they don't introduce anything 'extra' to cause more problems for everyone.

 

[Rob G.]

Still fiddling round the edges, but clears up doubt about streaming introduced by the Bamford case.

Cheers,

Rob