ABOUT THE WEBINAR
On 8 December 2022, the ATO released its finalised guidance documents on the application of section 100A of the Income Tax Assessment Act 1936 (Cth), which concerns the tax treatment of income distributions from trust.
In February 2022 the ATO released four pieces of guidance (two of which were in draft form) that demonstrated a more aggressive position in relation to the taxation of distributions from discretionary trusts to related companies and family members.
These guidance documents caused significant concern within the tax profession and it seemed that the ATO intended to attack what many accountants may consider to be regular tax planning when dealing with trust income in a tax effective manner.
Since the guidance documents were issued, the ATO has in part clarified its position in public forums, but concerns have remained about the ATO's position.
The key developments in the finalised guidance documents as compared with the draft documents are as follows:
an acknowledgment that cultural factors (such as a cultural practice of gifting) are relevant to determining whether an arrangement is an ordinary family or commercial dealing;
a notation that the operation of section 100A can have wider tax implications for the parties to the arrangements, including the availability of franking credits for beneficiaries and the withholding tax treatment for foreign resident beneficiaries;
guidance on the approach to be adopted where an arrangement does not fall within the white zone, green zone or red zone;
further guidance as to what it means for a beneficiary to receive their entitlement; and
revised examples of when 100A will not apply when trust entitlements are retained by the trustee.
Now the ATO guidance has been finalised, it is important to consider the implications of the ATO's views on past practices and future tax planning for trusts.
Please join us for our webinar to discuss our initial views on the implications of the finalised guidance for you and your clients. To register, please click here.
SpeakerS
Andrew Noolan
Partner
E ajn@bwslawyers.com.au
P 02 9394 1092
Geoff Stein
Partner
E gds@bwslawyers.com.au
P 02 9394 1008
Matthew McKee
Partner
E mpm@bwslawyers.com.au
P 02 9394 1032