The Government recently passed new Trust Legislation which clarifies the taxation treatment of trust income and the manner in which the trust beneficiaries are taxed when made presently entitled to a share of the trust’s net income. The legislation rewrite puts to rest the debate that arose after the ATO released its Practice Statement regarding
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The government has introduced legislation which applies from 1 July 2010 which requires “closely held trusts” to withhold tax from distributions to beneficiaries where the beneficiary has not provided its tax file number (TFN) to the trust and the trust has not reported the TFN to the Australian Taxation Office (ATO) within a specified time
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You may be aware that the Australian Taxation Office recently challenged the validity of trustees using streaming clauses within discretionary trust Deeds to enable different classes of income to be distributed to different beneficiaries (e.g Franked income, capital gains, interest income etc). Following the 2010 High Court decision in Bamford v F C of T,
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Further to Client Alert No 2, the Australian Taxation Office (ATO) has finalised Draft Taxation Ruling TR 2009/D8 and released it in final form as Taxation Ruling TR 2010/3. In addition, the ATO has released Practice Statement PS LA 2010/4 which gives ATO employees guidance as to how TR 2010/3 should be interpreted (but also
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In the 2009 Federal Budget, it was announced that the maximum concessional contribution able to be made to a complying superannuation fund for the 2009/10 financial year would be halved to $25,000 (and a transitional amount of $50,000 for those taxpayers over the age of 50). This has focused attention on contributions which may inadvertently
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On 16 December 2009, the Australian Taxation Office (ATO) released Draft Taxation Ruling TR 2009/D8 (now TR 2010/3). The draft ruling outlines the ATO’s position where a private company with a present entitlement to an amount from a trust may be taken to have made a loan to the trust under Division 7A of the
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Distributing income from trusts to companies has been a longstanding practice by taxpayers and practitioners to limit the tax on earnings initially to the corporate rate of 30%. Any “top up” tax is usually paid by the shareholder when the company declares dividends as a result of their marginal rate often being higher than the
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