In media release No 2011/155, issued 21 November 2011, the Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, announced the release of a consultation paper on modernising the taxation of trusts.
"The consultation paper highlights a number of options for reform to ensure businesses and individuals can continue to use trusts with confidence. The options are designed to achieve fair and consistent tax outcomes, while assuring the community that using trusts does not provide inappropriate opportunities to manipulate the tax system," Mr Shorten said.
The options canvassed in this paper have been developed within the broad policy framework currently applying to the taxation of trust income, drawing heavily on the expertise of the private sector, through the Tax Design Advisory Panel and the Board of Taxation.
Mr Shorten said that the Government is aware that the current restrictive definition of 'fixed trust' is an issue for trusts other than MITs and considers that a review of different options for a more workable approach is warranted.
Treasury will release a separate discussion paper on the appropriateness of the current definition of 'fixed trust' for public consultation early next year. This will allow the Government to consider the problems with the current definition and announce its response around the middle of the year.
The closing date for submissions on the consultation paper is 10 February 2012.