Published on 04 Jul 11
by THE TAX INSTITUTE
On 22 July 2011 the Australian Taxation Office (ATO) published ATO Interpretative Decision ATO ID 2011/58 (ATO ID 2011/58). The topic was „Income tax: whether trust distributions can be assessed under section 6-5 of the ITAA 1997?. ATOID 2011/58 has significant implications, not only for insurance companies to which it is addressed but the many businesses which are taxed on revenue account on a net profit basis with respect to their interests in trusts, such as banks and other financiers, construction firms, developers etc.
We therefore would like to highlight a number of issues we see in the reasoning provided by the ATO in ATO ID 2011/58. Because of the importance of the topic we consider it should be identified as a high priority technical issue and escalated to the rulings process for review by the Public Rulings Panel