Our international tax series discusses tax issues relating to non-resident beneficiaries of Australian trusts and resident beneficiaries of foreign trusts.
We have previously written on the ATO releasing guidance on demergers and back-to-back CGT roll-overs. The ATO recently released Draft Taxation Determination TD 2019/D1 concerning demergers although the ATO’s draft views may be illustrative of the Commissioner’s views in the context of back-to-back CGT rollovers.
The Australian Taxation Office (ATO) has released key super contribution caps, rates and thresholds for the 2016/17 year. These include:
- Concessional contribution caps – for persons aged less than 49 on 30 June 2016 the cap will remain at $30,000 - for persons aged 49+ on 30 June 2016 the higher cap of $35,000 will apply;
- Non-concessional contributions cap- will remain at $180,000, while the “bring forward” cap will remain at $540,000;
- CGT contributions cap - will increase to $1,415,000.
- Super guarantee maximum super contribution base- will increase to $51,620 per quarter, while the super guarantee rate will remain at 9.5%;
- Lump sum low rate cap- will increase to $195,000.
The article discusses the tax issues raised when creating and dealing with unpaid present entitlements by trusts, including CGT issues, which should always be carefully considered before embarking on a proposed transaction.
On 22 October 2015, Rob Jeremiah delivered a presentation at the ‘Taxation Aspects of Estate Planning and Business Succession – The First Annual Symposium’ held in Melbourne by Television Education Network.
At this event, Rob presented a paper called ‘CGT Hotspots in Restructuring Trusts in Estate Planning,’ written by Sam Campbell, Will Monotti, Ashleigh Eynaud and himself.
The Full Federal Court dismissed the Commissioner’s appeal in Commissioner of Taxation v Devuba Pty Ltd  FCAFC 168, confirming the earlier Administrative Appeals Tribunal (AAT) decision that the existence of a dividend access share (DAS) arrangement did not affect the taxpayer’s ability to apply the capital gains tax (CGT) small business concessions to a capital gain arising from the disposal of ordinary shares in the applicant company.
The primary issue considered in that case was whether the existence of the DAS caused the taxpayer to fail to meet the small business participation percentage (SBPP) of 90%.
On 10 May 2013, the High Court of Australia refused the taxpayer special leave to appeal FCT v Greenhatch  FCAFC 84;  AATA 479.
Accordingly, prior to 1 July 2010 and the amendments made by TLAM No 5 2011, differential streaming of capital gains between trust beneficiaries was ineffective. The beneficiaries of any trust that has differently streamed capital gains will have an exposure to audit activity, amended assessments and penalties.