International Law

Trusts taxation law to be reviewed

By David Jacobson

The Assistant Treasurer has announced that the Government plans to introduce amendments before 30 June 2011 so that beneficiaries can continue to use the primary production averaging and farm management deposits provisions in a loss year.

To address the issues raised by the High Court decision in Commissioner of Taxation v Bamford , the Assistant Treasurer has also announced a public consultation process as the first step towards updating the trust income tax provisions in Division 6 of Part III of the Income Tax Assessment Act 1936 (ITAA 1936) and rewriting them into the 1997 Act.

Any options will seek to ensure that net taxable income of a trust is assessed primarily to beneficiaries. Trustees will continue to be assessed only to the extent that amounts of net taxable income are not otherwise assessable to beneficiaries. The options will not include the taxation of trusts as companies, which would be a major departure from the current law.

Full post as published by Australian Regulatory Compliance Review on December 19, 2010 (boomark / email).