25 Oct 12 Trusts policy options paper released
In media release No 2012/122, issued 24 October 2012, the Assistant Treasurer and Minister Assisting for Deregulation, David Bradbury, announced the release of a policy options paper relating to the taxation of trust income.
"The release of this paper is a significant step towards creating a simpler and more streamlined system for the taxation of trusts", Mr Bradbury said.
The policy options paper articulates the design of two alternative models, which are referred to as the "economic benefits model" and the "proportionate assessment model" respectively.
Broadly, the economic benefits model (EBM) would assess beneficiaries on taxable amounts distributed or allocated to them, with the trustee assessed on any remaining taxable income.
In contrast, the proportionate assessment model (PAM) would assess beneficiaries on a proportionate share of the trust’s taxable income equal to their proportionate share of the "trust profit" of the relevant class. In this way the PAM seeks to improve the current approach by providing for amounts to be dealt with according to the trust profit or class amounts rather than the "income of the trust estate". A class is a category into which parts of the trust profit can be allocated.
The Government welcomes stakeholder views on the paper. Treasury will conduct workshops in Brisbane (19 November 2012), Sydney (20-21 November 2012) and Melbourne (26-27 November 2012) with interested stakeholders.
"I encourage all interested parties to participate in the consultation," said Mr Bradbury.
Submissions on the policy options paper close on 5 December 2012.