Australia’s 600,000 trustees have less than a week to consider whether they need to act in response to key amendments to legislation for taxing of trusts before 30 June.
The changes were passed by the Senate in the Tax Laws Amendment (2011 Measures No. 5) Bill last night.
Once Royal Assent is given in coming days, this new law will require trustees wishing to stream capital gains and franked distributions to particular beneficiaries to act before 30 June.
The Tax Institute’s Senior Tax Counsel Robert Jeremenko said the new law confirms that trusts are able to stream capital gains and franked distributions, provided the relevant trust deed permits such actions.
“The provisions require trustees to make certain resolutions prior to 30 June and to ensure that their trust deed in fact permits the streaming to occur,” Mr Jeremenko said.
“Although there has been a long-standing ATO practice of allowing trustees to consider their position after 30 June, the new provisions actually require action before then.
“The Tax Institute welcomes the certainty that this law provides around streaming, but we are concerned that trustees are fully aware of their year-end obligations.
“The new measures are complex and we urge trustees to consult with their tax professional to get things right.”
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, T: 02 8223 0011, M 0468 987 300
Craig Regan, Lighthouse Communications, 02 9692 8811, 0408 448 527.