03 Jun 11 Preamble - Friday 3 June 2011
Yesterday, the long waited trust streaming measures were introduced into the House of Representatives as part of Tax Laws Amendment (2011 Measures No. 5) Bill 2011.
The Tax Institute is pleased to see these measures finally before the Parliament. As members will recall, the Assistant Treasurer and Minister for Financial Services and Superannuation, the Hon Bill Shorten MP presented the Discussion Paper that was the genesis for the measures at our 26th National Convention in March 2011. We made a submission on the proposals in the Discussion Paper, and also made a submission following the release of the Exposure Draft (ED) legislation in April.
Many reactions to the ED were that the measures were overly complex, and despite some tweaking, the Bill is by no means simple. This is a difficult area of law, and achieving simplicity at this stage may be at the expense of certainty. These provisions are an interim solution to deal with the fallout from Bamford, and have been achieved without amending Division 6 itself (which could have led to unintended consequences and even greater uncertainty).
We are very pleased that in his second reading speech and in the explanatory memorandum to the Bill, the Minister reaffirmed the government’s commitment to reforming the whole of the income tax law for trusts. We see this wider review of Division 6 as being an opportunity for not only clarity, but also for simplicity.
Despite the intense consultative process and hard work of Treasury, there may be scope for unintended consequences arising from the new provisions. The Minister clearly stated in his second reading speech that if this is the case, the Government will act to retrospectively amend the provisions to ensure that the policy intent is achieved.
We know that many members will be eager to learn about the new measures and the impact on their clients. The Tax Institute is committed to leading practitioners through the details of this legislation and its impact on your clients. We will be releasing a Trusts Distribution Information Service, which will include regular updates, face to face and online CPD, printed publications, discussion forums and more. Click here to register your interest in this information.
Robert Jeremenko FTIA