Published on 17 May 12
by SOUTH AUSTRALIAN DIVISION, THE TAX INSTITUTE
The effect of both the Trust Streaming legislation and the ATO's withdrawal of IT 328 and 329 has meant that trust distributions need to be effected by no later than 30 June 2012 to prevent any risk of an adverse tax assessment.
Coupled with these developments,the ATO has recently released Draft Ruling TR 2012/D1 setting out its detailed views on the meaning of "income of a trust estate". This ruling will significantly impact how trust distributions are prepared for the current and future financial years.
This paper provides practical insights into the difficult issues confronted by tax professionals in this area. It works through a range of case studies and sample distribution minutes.
Specific topics include:
- Preparing your practice for the 30 June deadline - what can be done?
- Effectively dealing with differences between tax net income and trust income
- Franked distributions and assessable capital gains: the practical issues
- The interface between the Trust Streaming measures and Small Business CGT concessions
- Capital distributions - when necessary?
- Drafting minutes based on a quantum approach and modified proportionate approach
- Income streaming and recording the character of the receipt.