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02 Mar 12 NTLG Trust Consultation Sub-group

Last Tuesday 21 February 2012, Andrew Mills FTIA (Greenwoods & Freehills) and Andrew Noolan FTIA (Schurgott Noolan) represented The Tax Institute at a meeting of the ATO’s NTLG Trust Consultation Sub-group. At the meeting participants discussed a number of issues, including:

  • The ATO’s compliance and education efforts in relation to the new streaming rules for the year ended 30 June 2011
  • The deferral of the finalisation of TR 2004/D5.
  • The likely withdrawal of the ATO’s Statement of Principles in relation to resettlement following the Full Federal Court’s decision in Commissioner of Taxation v. Clark [2011] FCAFC 5 (Clark). TheATO is considering publishing a PSLA updating its views on resettlements.
  • The ATO’s soon to be released draft ruling on “Income tax: meaning of 'income of the trust estate' in Division 6 of Part III of the Income Tax Assessment Act 1936 and related provisions.” This ruling is due to be issued (in draft form) on 28 March 2012.
  • Recent trust cases including the decision in Montgomery Wools Pty Ltd as trustee for Montogmery Wools Pty Ltd Superannuation Fund [2012] AATA 61 which may support the Commissioner's views on whether an unpaid present entitlement is a loan for Division 7A purposes.
  • An update to the Decision Impact Statement on the decision in Colonial First State Investments Ltd v C of T [2011] FCA 16.
  • Treasury’s consultation efforts with respect to the reform of taxation of trusts. Treasury outlined the main themes observed through the submissions received in response to the consultation paper, such as the problems with the current need to determine entitlements before 30 June, concerns over character retention and streaming (other than capital gains and franked distributions) and the need for the law to deal appropriately with the taxation of bare trusts.

Members who would like further information in relation to the above are encouraged to contact us at Tax Policy.

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