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.