Trusts

UPEs as loans - end of an era?

UPEs as loans - end of an era?

If 16 December 2009 was the beginning of the Australian Taxation Office (ATO) treating an unpaid present entitlement (UPE) with a corporate beneficiary as a loan for purposes of Division 7A, could 28 September 2023 be the end of that era?

Section 100A: if you want BBlood, you’ve got it: 100A and capital amounts

Section 100A: if you want BBlood, you’ve got it: 100A and capital amounts

On 19 September 2022, Justice Thawley of the Federal Court handed down his decision in BBlood Enterprises Pty Ltd v FCT [2022] FCA 1112 (BBlood), the most recent decision on section 100A of the Income Tax Assessment Act 1936. The Australian Taxation Office (ATO) was successful in arguing that section 100A applied.

Can Part IVA apply to trustee discretions? Yes, according to the Federal Court

Can Part IVA apply to trustee discretions? Yes, according to the Federal Court

The recent Federal Court decision of Minerva Financial Group Pty Ltd v Commissioner of Taxation [2022] FCA 1092 (Minerva) signifies that the Federal Commissioner of Taxation (Commissioner) can successfully scrutinise a trustee’s discretion under the general anti-avoidance provisions (Part IVA).

TD 2022/11: ATO finalises views, relief for some taxpayers but a sting for others

TD 2022/11: ATO finalises views, relief for some taxpayers but a sting for others

We wrote about Draft Taxation Determination TD 2022/D1 (Draft TD) on Division 7A and unpaid present entitlements (UPEs) here. On 12 July 2022, the Australian Taxation Office (ATO) finalised the Draft TD as Taxation Determination TD 2022/11 (Final TD).

PCG 2017/13: sub-trust arrangements – welcome (continued) relief from the ATO

PCG 2017/13: sub-trust arrangements – welcome (continued) relief from the ATO

Draft Taxation Determination TD 2022/D1 sets out the Australian Taxation Office’s (ATO) views on when an unpaid present entitlement (UPE) with a corporate beneficiary is a loan for the purposes of Division 7A of the Income Tax Assessment Act 1936. We wrote about TD 2022/D1 here.

Section 100A: welcome Media Release by the Assistant Treasurer

Section 100A: welcome Media Release by the Assistant Treasurer

We wrote that 2022 is the ‘Year of 100A’ after the Australian Taxation Office (ATO) released three guidance products, two in draft, on section 100A and the ATO’s appeal to the Full Federal Court from the decision of Logan J in Guardian AIT Pty Ltd ATF Australian Investment Trust v FCT [2021] FCA 1619 on section 100A.

Draft Practical Compliance Guideline PCG 2022/D1: are you on the highway to hell?

Draft Practical Compliance Guideline PCG 2022/D1: are you on the highway to hell?

After our semi-serious opening statement on the Australian Taxation Office’s (ATO) recently released guidance on section 100A and unpaid present entitlements, this is one of a series of deep-dive articles on that guidance.

Capital gains, Discretionary Trusts and Foreign Residents: round 3 to the ATO

Capital gains, Discretionary Trusts and Foreign Residents: round 3 to the ATO

We wrote here and here about the Greensill (Thawley J) and Martin (Steward J) Federal Court decisions. In those decisions the Federal Court found in favour of the Australian Taxation Office (ATO) that section 855-10 of the Income Tax Assessment Act 1997 (ITAA 1997) did not disregard a non-taxable Australian property capital gain distributed to a foreign resident beneficiary of an Australian discretionary trust.

“Stamping” Of Trust Deeds In Victoria

“Stamping” Of Trust Deeds In Victoria

While the application of land transfer (stamp) duty is reasonably straight forward for land transfers such as a purchase of property under a contract of sale, the application of duty in relation to declarations of trust can be complicated.

Defining the beneficiaries of a discretionary trust

Defining the beneficiaries of a discretionary trust

This article looks at the scope of the definition of the term “beneficiary” in a discretionary trust deed, and, in particular, examines the ambiguities that sometimes arise in relation to the terms “spouse” and “child” within that definition

Sladen Snippet – Addy – ATO wins backpacker tax case in the Full Federal Court

Sladen Snippet – Addy – ATO wins backpacker tax case in the Full Federal Court

As we discussed in Coelho v FCT [2020] AATA 2474, different tax rates apply to residents and non-residents. Further, under Pt III of Sch 7 to the Income Tax Rates Act 1986, a working holiday maker pays tax at 15% on the first $37,000 of income in Australia. Commonly referred to as the ‘backpacker tax’.

Capital gains, discretionary trusts, and foreign residents – round 2 to the ATO

Capital gains, discretionary trusts, and foreign residents – round 2 to the ATO

We wrote here on the decision of Thawley J of the Federal Court in Peter Greensill Family Co Pty Ltd (trustee) v FCT (Greensill) where the Commissioner of Taxation was successful in arguing that section 855-10 of the Income Tax Assessment Act 1997 (ITAA 1997) does not disregard a capital gain distributed to a foreign resident beneficiary of an Australian discretionary trust. The taxpayer has appealed that decision to the Full Federal Court.

Sladen Snippet –Trust deeds of discretionary trusts holding NSW residential land must now be amended before 31 December 2020 to avoid foreign surcharges

Sladen Snippet –Trust deeds of discretionary trusts holding NSW residential land must now be amended before 31 December 2020 to avoid foreign surcharges

As referred to in our previous articles, the State Revenue Legislation Further Amendment Bill 2020 (NSW) has now received royal assent on 24 June 2020.

Trusts and the franking credits trap: can we fix it?

Trusts and the franking credits trap: can we fix it?

Beneficiaries of a unit trust may only claim franking credits if they are a “qualified person” in relation to the franked dividend. In order to be a qualified person the taxpayer must satisfy both the related payments rule and the holding period rule.

ATO announces extension for Division 7A compliance

ATO announces extension for Division 7A compliance

As part of its response to COVID-19, on 13 May 2020 the Australian Taxation Office announced that it has extended the time for lodgment of 2019 tax returns for certain companies and trusts and made changes to its administration of Division 7A of the Income Tax Assessment Act 1936.