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Taxing Trust Issues

Published on 24 Jul 2003 | Took place at Leonda by the Yarra, Hawthorn, VIC

Division 152 and Section 109UB

Tax advisers and their clients may have escaped the Entity Tax Regime but received instead a constant barrage of assaults on trust structures and transactions. The recent action by the ATO on service trusts, the ATO Practice Statement on treatment of trust capital gains, the possible denial of CGT relief under Div 152, and of course the Section 109UB saga, are just a few examples of trust tax matters under the spotlight by both the Federal Government and the ATO.

This seminar examined both the Div 152 CGT issue and latest developments on the Section 109UB front arising out of a special TIA meeting with the Treasurer's tax advisers and Treasury on 11 July 2003.

Individual sessions

Taxing Trust Issues

Author(s):  Andrew O'BRYAN This seminar paper covers the following:
- where a business is held in a discretionary or non fixed trust or where a person is a beneficiary under such a trust there is the real possibility of a denial of the Div 152 CGT concession on the sale of a CGT asset
- to ensure the concession can be obtained trust deeds need to be amended and this requires careful drafting. GST and stamp duty issues also are complex. Added to these issues is Part IVA, and the ATO Practice Statement on resettlements
- a discussion on ATO ID 2002/901 where it appears that all the charities in the world are capable of being counted toward the net value test of a discretionary trust and beneficiaries
- the Treasurer's Press Release dated 25 June 2003 was designed to provide certainty and assistance to taxpayers and their advisers. However the lack of clarity about which payments are excluded is an ongoing concern given the start date of 12 December 2002 and the fact that any law is months away.

Materials from this session: