Trusts 2019

Taxing private trusts - A moving target

Source: Taxation In Australia Journal Article

Published Date: 1 Feb 2019


Our revenue authorities have been very active recently issuing judgments, making pronouncements and intensifying enforcement activity, all directed to the way the tax system operates in relation to income made from, and gains arising on transactions with, assets that are held on trust. This article highlights the impacts of some important recent developments affecting private trusts. Many of the problems displayed in the cases arise from two fundamental problems: misconceptions about the nature of a trust, viewing it as a type of entity, rather than an arrangement; and the inherent difficulties in correctly predicting whether the courts will apply or relax the basic doctrine in the particular circumstances of the taxpayer. The article also looks at some issues in relation to funding trusts, correctly allocating the tax liability on income and gains arising from assets held on trust (particularly if foreign beneficiaries or foreign assets are involved), and vesting trust assets.

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Trusts 2019

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