CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Australia's Board Of Taxation Considers Bare Trusts Tax Reform

Australia's Board Of Taxation Considers Bare Trusts Tax Reform

by Mary Swire, Tax-News.com, Hong Kong

14 February 2018


Australia's Board of Taxation has published the results of its review into the taxation of bare trusts.

The Board considered whether, and how, to legislate in respect of what it said was the widespread practice of disregarding or looking through these trusts for income tax purposes. This practice is maintained by an administrative approach from the Commissioner of Taxation.

The Board estimates that there are almost AUD4.5 trillion in assets held via these arrangements by licensed custodians alone.

The Board recommended that it is now appropriate to enable certain bare trusts to be looked through for income tax purposes. It said that "where the terms of the trust are in substance equivalent to direct ownership of the assets by the beneficiary, the tax consequences should be analogous."

Under these rules, a person would be required to provide an income tax return as though any income, gains, and losses were made or derived personally.

The Board recommended that the reform could be achieved through a characteristics-based approach, where trusts exhibiting certain characteristics would qualify for look-through treatment. It recommended that the Government hold a consultation to determine and finalize the core characteristics and disregarded features of the arrangements that would come under the scope of any new law.

Revenue Minister Kelly O'Dwyer said: "This report is an important contribution to the Government's broader regulation reform agenda and the Government thanks the Board for its report."

A statement on O'Dwyer's website said that the Government will "look to progress the recommendations to streamline arrangements for bare trusts as part of the regulatory reform program. Treasury will undertake further consultation on the scope of potential changes, for example, in defining the core characteristics of a bare trust for taxation purposes."

TAGS: tax | law | trusts | Australia | regulation

To see today's news, click here.

 






Close

Password Reminder

Please enter your email address to receive a password reminder.

 











Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »