ARTICLE · 22 MAY 2011

Trust Deed Reviews Are More Vital Than Ever

Crowe Horwath

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Assistant Treasurer Bill Shorten’s announcement on 4 March 4 2011 that the Federal Government will adopt two Board of Taxation recommendations to clarify the definition of ‘distributable income’ of trusts and allow streaming of capital gains and franked distributions was enthusiastically welcomed.

AustraliaTax

Steve Di Leo

Assistant Treasurer Bill Shorten's announcement on 4 March 4 2011 that the Federal Government will adopt two Board of Taxation recommendations to clarify the definition of 'distributable income' of trusts and allow streaming of capital gains and franked distributions was enthusiastically welcomed.

Yet, uncertainties remain for the 600,000 trusts in Australia. As a result, trust deed reviews are as vital as ever. Indeed, for many clients, the Assistant Treasurer's announcement gives a greater reason to review trust deeds than ever before.

Announcement and Consultation Paper

The Assistant Treasurer aims to achieve certainty for trusts in the near term, which is why the consultation paper makes it clear that the changes to the law are a 'stop gap' measure. They are really only tweaks to the existing rules before the real reform begins with a wholesale re-write of Division 6 of the 1936 Tax Act. In the coming years, this Division will be completely modernised and

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