Australia To Modernize Taxation Of Trust Income
Thursday, October 25, 2012
The Australian government is again consulting on proposals to take forward its plans for
the modernization of trust income taxation.
According to Assistant Treasurer David Bradbury, the release of a policy paper
on the plans represents a significant step towards creating a simpler and more
streamlined system for the taxation of trusts.
The paper forms the government's response to feedback received from earlier
consultations. An initial consultation was launched in November last year, with
the then Assistant Treasurer Bill Shorten saying that the time had come to resolve
ongoing issues in the interaction of trust and tax laws. In July, the government
unveiled changes to the taxation of fixed trusts, which would modify or replace
the existing definition of "fixed trust".
The government had originally intended to implement the reforms from July 1,
2013, but one of the outcomes of the November consultation was a decision to
push back the start date to July 1, 2014. The now Assistant Treasurer, David
Bradbury, said at the time that this provides more time for the government to
develop the law and for the industry to prepare for the changes.
The new policy paper further develops the reform options for updating and rewriting
the trust income tax provisions. The Treasury will hold meetings with stakeholders
before the close of written submissions, the aim of which is to provide a collaborative
forum for stakeholders to work through the possible new models for taxing trust
income and highlight any outstanding issues with their operation.
Submissions close on December 5, 2012.