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Tax professionals applaud trust tax law reform commitment

Publication date: 17 Dec 10 | Source: THE TAX INSTITUTE

The Federal Government's decision to overhaul archaic trust laws is a boost for business that will resonate for years, the country's leading tax association said today.

The Taxation Institute of Australia says tax professionals are pleased that their calls for overdue reform have been answered after months of advocacy.

"The need for reform has been amplified by the High Court's Bamford decision, the Henry Tax review, the Treasury 'Red Book' advice to the Government, and the continuing difficulties experienced by tax professionals," said Institute Senior Tax Counsel Robert Jeremenko.

"Our members have consistently raised this as the policy area they most wanted reformed.

"A simpler, clearer system that gives certainty to thousands of small businesses can only be a positive thing for the economy."

Mr Jeremenko said the High Court recently recognised that it has been more than 20 years since the courts first identified the need for legislative clarification in this area of tax law.

"Many of the ongoing difficulties in this area have resulted from band-aid solutions to problems with the laws, compounded by the subsequent introduction of significant legislation such as the capital gains tax rules," Mr Jeremenko said.

"By embarking on this process of reform, the Federal Government has a chance to rewrite these outdated and cumbersome laws to reduce compliance costs and unfair outcomes and give greater certainty to the thousands of taxpayers that use trusts.

"We also welcome the involvement of the Board of Taxation, whose expertise and depth of experience will be invaluable in taking this significant step in trust income tax reform."

Mr Jeremenko said the Taxation Institute supports the Assistant Treasurer's goal for consultation that simplifies trust tax laws and preserves their original intent by producing greater clarity.

"We look forward to engaging with the Government and Treasury through the consultative process to ensure that the rewritten rules operate appropriately and achieve their policy intent."

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About the Taxation Institute of Australia:  The Taxation Institute is Australia's leading professional association in tax.  Working together with the tax profession they aim to improve the tax system and the delivery of tax services through education, sharing of information and consultation.

For more information: Robert Jeremenko, Senior Tax Counsel, Taxation Institute of Australia,   T: 02 8223 0011, M 0468 987 300 or Craig Regan, Lighthouse Communications, 02 9692 8811, 0408 448 527.