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Taxation of Trusts - The New 109UB

Published on 16 Apr 2004 | Took place at Law Society of Tasmania, Hobart, and KPMG, Launceston, TAS

Since March 1998 the provisions of section 109UB extended the operation of the deemed dividend rules to certain trust loans. From a practical perspective, these provisions have often been criticised for being poorly drafted, both leading to unsuspecting taxpayers being caught up in the provisions in the absence of any real 'mischief' and also to significant planning opportunities.

New legislation has now been introduced to Parliament with the aim of overcoming both the 'unfairness' and the 'gaps' in s109 UB. However, whilst the changes are significant, they leave open several issues, including some planning opportunities. In addition, the timing rules as to whether the new provisions (109XA) or the old 109UB apply are complex and contain many potential pitfalls.

If you have clients with trusts that have, or may have, corporate trustees, these materials will inform you of the latest developments.

Individual sessions

109XA, XB, XC - The new 109UB

Author(s):  Mark NORTHEAST

This seminar paper focusses on the practical implications of the new legislation using a number of case study examples.

This was also presented by Nigel Kingston at the Trusts Distributions: The new 's109UB' seminar held in Perth on 18 March 2004, and by Mark Northeast at the Taxation of Trusts - The New 109UB seminar held in Hobart and Launceston on 16 April 2004.

The paper includes some minor updates made by the author for presentation at the 'Division 7a downfalls' seminar held in Melbourne on 2 March 2005.

Materials from this session: