Published on 01 Jan 03
by "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE
Trusts cause considerable difficulties in the Australian income tax regime. For the purpose of exploring possibly better answers to the vexing problems, this paper
compares in detail the income tax regimes for trusts in Australia and the United Kingdom. The comparison demonstrates clearly that the Australian regime is
desperate for improvement. It can tax the wrong person for the wrong amount. The unfortunate taxpayer may even be subject to double taxation on that amount, if the
Commissioner strictly applies the relevant provisions in the law. By comparison, the UK regime arrives at the correct tax results far more often. It is also a more consistent regime based on a consistent principle of 'entitlement to income', which in general is applied equally to different types of trusts, including discretionary trusts and unit trusts.
Antony is a senior lecturer, discipline of business law, University of Sydney. Current at 01 January 2014
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