The government has released
draft amendments that will specifically allow the
streaming of capital gains and franked dividends derived by
The intention is that these amendments will apply for the 2011
year, but it is likely that there will be changes to the draft
proposals as there are some significant issues that have been
raised in submissions on the draft.
This places advisers in the difficult position of having to
guess which law will apply to the taxation of trusts as they attend
to their end of year tax planning.
At this stage our view is that the proposed amendments will not
require specific amendments to trust deeds but advisers may have to
fundamentally rethink how they implement and document trust
Year-end tax planning and the preparation of trust distribution
resolutions have been made more difficult by the administrative
position recently adopted by the ATO. In Improving the
Taxation of Trusts (released by the ATO on 28
April 2011) the following statement was made:
Trustees should be aware that regardless of
whether the proposed changes are enacted as currently set out, they
will not allow for trustee resolutions to be made on or before 30
June 2011 to be amended. Therefore in framing a resolution, a
trustee may need to also consider its tax effect should the law not
be enacted as proposed.
Until the legislative position is clear, advisers should
proceed with caution when preparing distribution minutes and will
have to try to ensure their minutes will have the desired effect
under both the current and proposed law.
It may also be prudent to implement general amendments to trust
(a) remove any requirements to distribute income by 30
(b) ensure the trustee has the power to attribute capital
gains and dividends to specific beneficiaries and to distribute
gross capital gains, not just the assessable component of any
If you have any questions in relation to trust deed
updates or trust distributions, please contact a member of our
Cooper Grace Ward was named Best Australian Law Firm in the BRW
Client Choice Awards 2010 - Revenue < $50m. Joint Best
Australian Law Firm in the BRW Client Choice Awards 2009 - Revenue
The firm has also been named as the fastest growing law firm in
Australia for 2009 by The Australian.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Exemptions or concessions on stamp duty could apply when contemplating the purchase or transfer of NSW real estate.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).