This week the Government released the long-awaited consultation paper on reforming the taxation of trusts.
The Tax Institute has welcomed the release of the paper, which marks the start of the process of modernising years of complexity in the law. Ongoing uncertainty over the tax treatment of trusts emerges as one of the top issues for reform for tax professionals. The legislation governing taxation of trusts is more than 50-years-old and must be brought into the 21st Century.
The Tax Institute has long called for reform in this area of the tax law in which legislative change is well overdue. Recent Court decisions have highlighted the ongoing compliance difficulties faced by the 600,000 trusts in Australia, many of which are used by small to medium businesses.
The Government is to be congratulated for grasping the opportunity to modernise the taxation of trusts as part of their ongoing reform process, as recommended by the Henry Tax Review. There is a significant program of work ahead to reform the trust tax provisions but we welcome the Government’s paper as an important starting point in the reform. Further details of the paper are outlined below.
There is a relatively tight consultation timetable, but The Tax Institute will be closely involving members in discussions on the various proposals for reform. If you would like to be involved, please send through your details by 16 December 2011 to Tax Policy.
Robert Jeremenko FTIA