FAMILY TRUSTS – TAXATION – AUSTRALIA

Chalmers’ Shorten-era tax threat

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Original article by Greg Brown
The Australian – Page: 1 & 4 : 29-Sep-21

Labor abandoned a number of unpopular policy measures that contributed to its 2019 election defeat, including changes to the franking credit and negative gearing regimes. However, shadow treasurer Jim Chalmers is said to have pushed for Labor to retain a policy which targeted the use of family trusts to minimise taxation. He is believed to have raised the issue at a recent meeting of Labor’s strategic policy review committee. Sources have indicated that discussions regarding the policy on discretionary trusts are at a preliminary stage and the issue has not been debated by the shadow cabinet.

CORPORATES
AUSTRALIAN LABOR PARTY

Trust tax to bring in $2b a year: Labor

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Original article by Phillip Coorey, John Kehoe
The Australian Financial Review – Page: 4 : 9-May-19

The Parliamentary Budget Office estimates that taxing distributions from family trusts at 30 per cent would raise $7.7bn over four years and $26.9bn over 10 years. This compares with Labor’s forecasts of $4.1bn and $17.2bn respectively when it announced the proposal in mid-2017. Shadow treasurer Chris Bowen has also indicated that Labor’s plan to cap tax deduction for managing tax affairs will raise $375m over four years and $1.6bn over a decade.

CORPORATES
AUSTRALIAN LABOR PARTY

Trust tax to ‘hit Labor’s backyard’

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Original article by Adam Creighton
The Australian – Page: 2 : 18-Jan-19

Treasurer Josh Frydenberg claims that about 300,000 small businesses with turnover of up to $10 million would be affected by Labor’s proposal to impose a 30 per cent tax on the distributions of family trusts. The Treasury’s analysis of tax office data shows that the Greens-held seat of Melbourne Ports and the Labor seat of Adelaide would be hardest-hit by the policy, although the Coalition holds six of the 10 seats that would be impacted the most. Shadow treasurer Chris Bowen contends that 98 per cent of taxpayers would not be affected by the policy.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN TAXATION OFFICE, AUSTRALIAN LABOR PARTY, AUSTRALIAN GREENS, BDO AUSTRALIA LIMITED

Labor’s trust policy misses the rich

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Original article by Joanna Mather
The Australian Financial Review – Page: 6 : 2-Aug-17

Tax experts have questioned the likely effectiveness of the Federal Opposition’s proposed tax crackdown on family discretionary trusts in targeting wealthy Australians. Chapman Eastway CEO Sean Cortis says taxing family trusts at the same rate as companies would primarily affect people with investable assets of less than $A5m, rather than the "mega rich". The reforms are aimed at curbing the practice of income-splitting, but tax experts say wealthy families are more likely to "warehouse" money in a company within a family trust.

CORPORATES
AUSTRALIAN LABOR PARTY, CHAPMAN EASTWAY, BDO AUSTRALIA LIMITED, GRIFFITH UNIVERSITY. GRIFFITH BUSINESS SCHOOL

Taxing trusts as companies not a bad idea, lawyers say

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Original article by Joanna Mather
The Australian Financial Review – Page: 4 : 28-Jul-17

Opposition leader Bill Shorten has indicated that he will scrutinise the tax treatment of family trusts if Labor wins the next federal election. Currently, trust themselves are not taxed, with the income they distribute being taxed at a beneficiary level. However, it is possible that Labor may decide to start taxing trusts as companies, a move once considered by the Howard government. Michael Parker of Hall & Wilcox says such an idea has merit, provided that trusts are still able to access franking credits and the capital gains tax discount.

CORPORATES
AUSTRALIAN LABOR PARTY, HALL AND WILCOX, RSM GROUP, BDO GROUP PTY LTD

‘No quick fix’ in tax plan for family trusts

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Original article by Joanna Mather
The Australian Financial Review – Page: 5 : 27-Jul-17

There is speculation that Opposition Leader Bill Shorten will propose subjecting family trusts to the same tax regime as companies. However, Bob Deutsch of the Tax Institute has questioned the merits of such a strategy, arguing that the dividend imputation system means that some beneficiaries of a trust would entitled to a full refund of the taxes paid. The recommendations of the Ralph Review of Business Taxation in 1999 included taxing trusts in the same way as companies.

CORPORATES
AUSTRALIAN LABOR PARTY, THE TAX INSTITUTE, KPMG AUSTRALIA PTY LTD, GREENWOODS AND HERBERT SMITH FREEHILLS PTY LTD