2023 Residency

Residency – inbound foreign trust issues

Published Date: 17 Aug 2023


In this article, Australian taxation issues associated with foreign trusts are examined. In particular, issues around trust residency both for income tax and capital gains tax purposes are considered in detail, and the key differences between the two are highlighted. Change of residence rules as well as some complex double taxation agreement issues regarding trust residency/dual residency and related matters are also discussed. In addition, issues around the application of the transferor trust rules, s 99B and s 102AAM of the Income Tax Assessment Act 1936 (Cth), the controversies regarding reimbursement agreements and estate planning matters are also the subject of considerable informed discussion. Included in the analysis is a very succinct summary table of the key withholding obligations imposed on trustees in respect of different types of income, as well as numerous helpful examples in unusual contexts, such as how the death of an individual or the choice of executors might affect a trust’s residency status.

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2023 Residency

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