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Tax and Trusts: The Essential Basics

Published on 24 May 2005 | Took place at Nationwide, National

This seminar series was held at:
- UQ Business School Downtown, Brisbane on 1 March 2005
- Hawthorn Receptions, Hawthorn on 22 March 2005
- Launceston Function Centre on 12 April 2005
- Corus Hotel, Hobart on 14 April 2005
- Enterprise House, Unley on 12 May 2005
- City West Function Centre, West Perth on 13 May 2005
- The Menzies Hotel, Sydney on 24 May 2005.

The number of trusts used in Australia continues to grow at a tremendous pace. This is mainly because of the essential flexibility of trusts, tax advantages and the potential benefit of asset protection.

The tax and asset protection advantages can only be obtained if practitioners have a fundamental understanding of the way in which trust law operates. To ensure you obtain the available tax benefits, for example, small business CGT concessions and splitting income, you require a good knowledge of taxation laws as they relate to trusts. Moreover, the avoidance of unwanted tax burdens involves the exercise of skill and expertise on the taxation of trusts. The starting point to develop these skills is the proper understanding of the nature of trusts and having an overall 'big picture' of the taxation issues.

These materials provide an introduction to basic trust law concepts and a basic understanding of tax law concepts.

Get a 20% discount when you buy all the items from this event.

Individual sessions

Introduction to the taxing of trusts

Author(s):  Arlene MACDONALD

A trustee 'lives' by the trust deed. It governs what the trustee may or must do with the trust property including the acquisition and disposal of trust property and distributions of income and capital to beneficiaries. Some of those choices will have significant tax consequences. Various tax laws determine when an act done by the trustee such as the distribution of income or capital or the sale of a trust asset are taxed and in whose hands. The results will be different according to the type of trust. It is essential the trustee is properly advised on the tax consequences before making decisions about the trust property.

This paper is aimed at lawyers and other professionals who don't specialise in tax but who want or need to be able to identify the tax issues when advising trustees and beneficiaries to help them decide when to seek further advice. It gives a structured and logical introduction to the tax rules for the most commonly encountered trusts in SME accounting and legal practices. It is also very useful for those who simply want a refresher on the basics of the taxing of trusts or who are new to the area.

Topics covered include:

  • how are trusts treated for tax purposes
  • special tax rules for taxing trust income and distributions (trustee, beneficiaries, minor beneficiaries, franking credits)
  • CGT Events for actions concerning trusts
  • taxing special types of trusts
    • deceased estates
    • testamentary trusts
    • child maintenance trusts
    • other excluded trusts
    • foreign trusts
  • family trust elections/trust losses.

This paper was also presented by Steven Rosenstrauss at the 'Tax and Trusts: The Essential Trusts' seminars held in Sydney on 5 April 2006 and on 27 February 2007.

Materials from this session:

Introduction to trusts

Author(s):  Arlene MACDONALD

A trust is a relationship or obligation between trustee and beneficiaries. Trusts are not entities yet for many purposes (including tax) they are treated in some ways as if they were. To properly understand the tax and other issues relating to trusts it is essential for an adviser to have a good understanding of the true nature of trusts, trustees and beneficiaries. Many of the recent cases concerning the taxing of beneficiaries or trustees in the Federal Court and AAT turn on trust law issues such as whether beneficiaries are presently entitled to income or whether a purported distribution of trust income has been actually made.

This paper gives tax advisers an overview of trusts in the non-tax world to assist them in their 'real' world of tax law. It is aimed at those who don't really understand what they were taught about trusts and who still have gaps in their understanding of trusts. It is also very useful for those who simply want a refresher on basic trust law. Topics covered include:

  • the nature of a trust
  • difference between trusts and other relationships and entities
  • types of trusts
  • creating and ending express trusts
  • advantages and disadvantages of using trusts for business and investment purposes
  • importance of distributions
  • presently entitled
  • absolutely entitled.

This paper was also presented by Michael Walpole at the 'Tax and Trusts: The Essential Trusts' seminars held in Sydney on 5 April 2006 and 27 February 2007.

Materials from this session: