Trust vesting – the Commissioner finalises his views
Testamentary trust will structuring
Sladen Snippet; company tax rates – amongst the chaos a beacon emerged
We have previously written (see here and here) about the Tax Laws Amendment (Enterprise Tax Plan Base Rate Entities) Bill 2017 (the Bill) that proposes to deny the lower 27.5% corporate tax rate to corporate tax entities with less than $25 million of turnover that derive predominantly (80% or more) passive income (‘base rate entity passive income’) has not been debated by the Parliament since 12 February 2018.
Sladen Snippet - ATO extends Division 7A guideline to UPEs under Sub-Trust Arrangements maturing in the 2019 Income Year
On 15 August 2018, the Australian Tax Office (ATO) updated Practical Compliance Guideline (PCG) 2017/13 to extend its application to Division 7A sub-trust arrangements adopted in accordance with Practice Statement Law Administration 2010/4 (PS LA 2010/4) that mature in the 2019 income year.
Draft Tax Determination on Trust Splitting far from determinative
CGT marriage breakdown rollover does not apply to entities controlled by former spouses
In Ellison v Sandini Pty Ltd [2018] FCAFC 44, the Full Federal Court overturned decision which allowed Mr Sandini (the Taxpayer) to benefit from Capital Gains Tax (CGT) marriage breakdown rollover for the transfer of shares to an entity controlled by his former spouse, pursuant to a Family Court Order (FCO).
Trust vesting: draft ATO Ruling on trust vesting
The Commissioner issued Draft Taxation Ruling TR 2017/D10 “Income Tax: Trust Vesting – amending the vesting date and consequences of a trust vesting” on 13 December 2017.
The views in TR 2017/D10 are not materially different from those expressed at recent public forums, although TR 2017/D10 states those views in an administratively binding form and provides further detail (including several examples).
Sladen Snippet: TD 2017/20 confirms the ATO interpretation of “distributes” for the purpose of the FTDT
As previously reported in June this year, the Australian Taxation Office (ATO) published the Draft Taxation Determination TD 2017/D1 altering their previous published interpretation of the meaning of “distributes” for the purposes of the family trust distribution tax (FTDT).
The draft tax determination has now been published in its final form as TD 2017/20, confirming that FTDT can apply where there is a “distribution” to a person who is not a beneficiary of the trust.
Sladen Snippet - Differential streaming of franked dividends and franking credits case granted special leave
Court rules on “present entitlement” and “disclaimer of entitlement” to trust income
The concept of “present entitlement” within the meaning of section 97 of the Income Tax Assessment Act 1936 and validity of a “disclaimer of entitlement of income” were considered by the Full Federal Court in the recent case of Lewski v Commissioner of Taxation [2017] FCAFC 145 (Lewski) that illustrates the importance of having trust law and taxation law concepts properly aligned. Lewski was an appeal from a decision of the Administrative Affairs Tribunal.
ATO provides a “safe harbour” for fixed trusts
The Australian Taxation Office (ATO) published the final version of the Practical Compliance Guidelines (PCG) 2016/16, which provides guidance in relation to what will be considered by the Commissioner when exercising his discretion to treat an interest in the income or capital of a trust as being a fixed entitlement and by extension whether a trust is a fixed trust for the purposes of the tax law.
Sladen Snippet - ATO provides additional 7 years to repay UPE under sub-trust arrangements maturing in the 2017/18 income years
Practical Compliance Guideline (PCG) 2017/13 confirms the ability for a sub-trust arrangement using the 7-year option 1 investment agreement to be converted into a compliant loan, as described under section 109-N of Income Tax Assessment Act 1936 (ITAA 36). The ability to refinance UPE for an additional 7 years may be advantageous to taxpayers that would otherwise have been required to repay such arrangements by either 30 June 2017 or 30 June 2018.
Sladen Snippet - ATO guidance on liability of a legal personal representative of a deceased person
Are foreign trusts the new black?
Real life examples of problematic variation clauses
In September 2016, an article written by Sladen Legal's Phil Broderick, Will Monotti and Ashleigh Eynaud was published in the Tax Institute’s Journal, Taxation in Australia.
This article addresses how trust deed variation clauses vary from trust to trust and gives examples of some of the problematic ones we’ve seen.
Sladen Snippet – Court confirms trust deed variation to remove appointor/guardian was effective
Sladen Snippet - Son entitled to an interest in the family home
In Behman v Behman [2016] NSWCA 295, the Supreme Court of NSW confirmed the primary judge’s finding that the respondent was entitled to an equitable proprietary estoppel founded on the basis of the appellant’s representations of him having an interest in the family property.
