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Category Archives: Trusts
Trust investments- ATO says capital and not revenue
The concessions available in the case of capital gains tax, such as the discount, have been a significant factor encouraging taxpayers opting to treat gains as capital and not revenue. But now the Tax Office is getting tougher. First it happened in the case of private equity firms claiming CGT treatment for ‘carried interest’ (see TD 2010/21) and now the Office has issued TD 2011/21 dealing with investments made through trusts. The Tax office has not given up its fight. … Continue reading
Unpaid present entitlement – pre 16 December 2009
The lethal mix of trusts and Div 7A never stop to boggle the mind. Add taxation rulings and determinations and that’s an alchemist’s dream of a trip, a trap and an ambush. That’s what happened with the release of the mega ruling TR 2010/3 last year. The nightmare continues with the recent release of two new Determinations: TD 2011/15 and TD 2011/16. The views of the tax office about the circumstances in which an unpaid present entitlement (UPE) of a … Continue reading
Trustee’s powers – First there was Bamford and then came Colonial First State
First we had the High Court handing down a landmark decision in Bamford: Trustee had the power to include capital profits as trust income for the purposes of section 97 (1), provided proper there was proper authority for it. It followed that the assessable income of the beneficiaries will include capital profits considered as trust income by the trustee. In January 2011, the question of flexibility enjoyed by trustee referred to in Bamford came under examination in the Federal Court … Continue reading
Posted in Trusts, Uncategorized
Tagged Bamford, Colonial first state, Trustee, Trustee powers
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Budget 2011- Trusts in small business concessions
It was announced in the Budget that the following minor amendments will be made to ensure that taxpayers can have a non-zero direct small business participation percentage in situations where: shares in a company are held jointly by taxpayers; and a discretionary trust has not made a distribution in an income year where the trust had a tax loss or no net income for that year (Budget paper No.2 page 48) Although the proposed amendments do not appear extensive when … Continue reading
Trust reforms- call for more consultation
Following on from my blog post “Trust reform- so little time”, the following story appeared in the Australian Financial Review on 13 May 2011. It is calling further consultation on reform and suggests that the amnesty offered after Bamford be extended for another two years which would allow sufficient time to fix the issues in taxation of trusts.
Trust reform – so little time
Trusts have never been under such scrutiny as now. Pre-budget speculation about restrictions on distributions to children by family trusts and amendments in the Tax Laws Amendment (2011 Measures 3 ) Bill are upping the ante. With so much at stake, especially matters concerned with streaming trust income to beneficiaries, it is lethal to ignore the impact of TLA No 3 which is about to be passed into law. Exposure draft legislation has been out nearly a month and it is … Continue reading
