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Publication date: 29 Jun 11 | Source: THE TAX INSTITUTE

The Tax Institute has welcomed today’s ATO announcement of special administrative arrangements for the application of new distribution streaming measures for the nation’s 600,000 trusts.

The ATO guidance means that trustees and their advisers have been afforded additional time to consider how the new law affects them and to put appropriate records in place.

The guidance heads off a situation in which trustees and advisers may have had to make records by 30 June without having a full understanding of the measures contained in Tax Laws Amendment (2011 Measures No. 5) Bill, which passed the Senate last Thursday evening and now awaits Royal Assent.

“The ATO guidance follows consultation by the ATO with The Tax Institute and other professional associations,’ said Institute Senior Tax Counsel, Robert Jeremenko.

“It is good to see the ATO taking on board the profession’s concerns and adopting a practical approach.”

Trustees have been given a two month extension to 31 August 2011 to make records to satisfy the “specifically entitled” requirement for franked distributions.

Whilst the ATO will not be selecting cases for audit solely to determine whether trustees have complied with the law, they will be investigating cases where there has been a deliberate attempt to exploit weaknesses or deficiencies in the new provisions.

“The message is abundantly clear – trustees must play by the rules and conform to the intent of the policy,” Mr Jeremenko said.

Mr Jeremenko said the new law makes it clear that trusts are entitled to stream capital gains and franked distributions, a situation which was put into doubt by a High Court decision last year.


The Tax Institute is Australia’s leading professional association in tax.  It aims to improve the taxation system and the delivery of tax services through education, sharing of information and consultation.

For more information: Robert Jeremenko, Senior Tax Counsel, The Tax Institute, 02 8223 0011 or 0468 987 300

Craig Regan, Lighthouse Communications, 02 9692 8811 or 0408 448 527.

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