No 7: Trusts – Present Entitlement to Income and Trustee Resolutions

The Government recently passed new Trust Legislation which clarifies the taxation treatment of trust income and the manner in which the trust beneficiaries are taxed when made presently entitled to a share of the trust’s net income. The legislation rewrite puts to rest the debate that arose after the ATO released its Practice Statement regarding
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No 6: TFN Withholding for Closely held Trusts

The government has introduced legislation which applies from 1 July 2010 which requires “closely held trusts” to withhold tax from distributions to beneficiaries where the beneficiary has not provided its tax file number (TFN) to the trust and the trust has not reported the TFN to the Australian Taxation Office (ATO) within a specified time
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No.5: Clarification regarding streaming 2011 Federal Budget Update

You may be aware that the Australian Taxation Office recently challenged the validity of trustees using streaming clauses within discretionary trust Deeds to enable different classes of income to be distributed to different beneficiaries (e.g Franked income, capital gains, interest income etc). Following the 2010 High Court decision in Bamford v F C of T,
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No 4: ATO final ruling/practice statement on UPEs owing to companies

Further to Client Alert No 2, the Australian Taxation Office (ATO) has finalised Draft Taxation Ruling TR 2009/D8 and released it in final form as Taxation Ruling TR 2010/3. In addition, the ATO has released Practice Statement PS LA 2010/4 which gives ATO employees guidance as to how TR 2010/3 should be interpreted (but also
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No 3: Excess contributions tax

In the 2009 Federal Budget, it was announced that the maximum concessional contribution able to be made to a complying superannuation fund for the 2009/10 financial year would be halved to $25,000 (and a transitional amount of $50,000 for those taxpayers over the age of 50). This has focused attention on contributions which may inadvertently
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No 1: ATO looking to attack trust distributions to companies

Distributing income from trusts to companies has been a longstanding practice by taxpayers and practitioners to limit the tax on earnings initially to the corporate rate of 30%. Any “top up” tax is usually paid by the shareholder when the company declares dividends as a result of their marginal rate often being higher than the
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