04 Jul 13 On updating legislation on trusts
MEMBER 135 writes further:
“It seems to me that there is a simple solution to the millions of words that have been written about trust distributions.
Instead of talking about distributable income, just make it taxable income. We have a system, legislation and court precedent to show us what that means.
The intention of the current trust legislation is that trust taxable income is distributed and if not it is then taxed at the top marginal rate.
We also have a system of elections which do not have be made in writing nor do they have to be lodged with the ATO. This system works perfectly well. So why not apply this to trust distributions? Thus the nonsense of having 100,000 trustees meeting on the 30th June disappears. We also have Div 7A where the accountant fixes the loan accounts before the company tax return is lodged. Why not the same process for trusts? That is, the trust distribution, like the written loan agreement, is made before the tax return of the company or trust is lodged.
Let’s face facts – the role of the accountant is to fix the mess that the small business creates. Recognise this and the tax system then works. Tax agents fixed the ATO data base by being given access to the ATO computer via the portal. We are good at fixing things so let us do it.”