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Australian beneficiaries of foreign trusts will now be taxed on non-TAP capital gains distributed to them as ordinary income!

Publication date: 06 Feb 18 | Source: WEEKLY TAX BULLETIN

Issue: Issue 1, 5 Jan 2018

Pages: pp. 2-4


On 13 December 2017, the ATO finalised 2 tax determinations. The combined effect of these determinations is that capital gains made by a foreign trustee in respect of non-taxable Australian property (TAP) that are distributed to Australian beneficiaries will be taxed in the hands of the beneficiary as ordinary income pursuant to s 99B of the ITAA 1997 and not as a capital gain.

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Author profiles

Clinton Harding CTA
Clint is a partner at Arnold Bloch Leibler and leads the Sydney taxation practice. Clint advises across most taxes, with particular expertise in corporate and international tax, the taxation of financial instruments and transactions, and the management of tax audits and disputes with the ATO. Clint is the author of numerous tax articles, a regular presenter, and is currently a working member of The Tax Institute’s Large Business and International Committee. In 2018, Clint won The Tax Institute’s Corporate Tax Adviser of the Year Award and is the National Chair of the Law Council of Australia’s Taxation Committee. - Current at 26 June 2019
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Peter Scott FTI
Peter Scott, Peter Scott practices in Arnold Bloch Leibler’s taxation group. Peter provides strategic and technical tax advice to a diverse range of Australian and international clients, public corporations, private groups, and high-net-worth individuals. He advises across most areas of tax with a particular focus on corporate and international tax, deals, employee share schemes, trusts, and tax controversy matters. Peter graduated from the University of Tasmania in 2013 with a Bachelor of Business (Accounting) and Bachelor of Laws with first class honours in law. Peter worked as a tax analyst at a Big 4 accounting firm before joining the firm as a lawyer in early 2015. Peter was admitted to practice in August 2014. - Current at 12 February 2019
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