It's hard to believe it but it's now almost eight years
since the Commissioner issued his ruling and practice statement
(TR2010/3 and PSLA 2010/4) on unpaid present entitlements and apart
from some imprecise comments in the 2016-17 Federal
Budget1, we have seen little movement on
the recommendations for change which were made in the Board of
Taxation's Post implementation Review into Division
7A2. As a consequence we are still seeing
a reasonable volume of clients taking a restructuring approach in
solving the perennial issue of how to attract reasonable rates of
tax for working capital in trust owned businesses.
Consider two competitors in town, with the only difference
between them that one is structured in a discretionary family trust
and the other a company. Economic conditions are favourable and
both are seeking to drive improved profits into long-term growth.
Our company competitor will simply apply retained profits towards
his expansion plans, but as we know
