Friday, June 4, 2010
Australiaís Assistant Treasurer, Nick Sherry, has released for public consultation the exposure draft regulations and explanatory material for extending tax file number (TFN) withholding to closely held trusts, including family trusts.
The extension of the TFN withholding arrangements to closely held trusts and family trusts is intended to prevent taxpayers from avoiding paying tax. It will allow the Australian Taxation Office (ATO) to align better the information obtained from trustees with the amounts reported by the trustís beneficiaries.
Additionally, this measure will allow the ATO to check whether the assessable income of beneficiaries of these trusts correctly includes their share of the net income of the trust.
"I encourage interested parties to provide feedback on this measure," Sherry said. "The draft regulations contain several important aspects which are the result of previous consultations."
The exposure draft regulations prescribe details of the administration of the TFN withholding measure, including the withholding rate and payments threshold; and the types of trusts that will be excluded from the operation of the measure, including discretionary mutual funds, employee share trusts and solicitor trusts.
"The regulations will operate, in part, to exclude a number of classes of trusts not intended to be within the scope of the measure," the Assistant Treasurer said. "These exclusions arose directly from consultation previously undertaken with stakeholders and trustees."
The measure commences on July 1, 2010 and submissions are to be lodged by June 10, 2010.