Consultation paper released – Modernising the taxation of trust income – options for reform

On 21 November 2011, the Assistant Treasurer, the Hon Bill Shorten MP, issued a media release entitled Over 660,000 trusts to benefit from tax reforms. 

The government has released a consultation paper on modernising the taxation of trust income, which explores the current issues impeding the effective operation of Division 6 of Part III of the Income Tax Assessment Act 1936, as well as those impeding the effective taxation of trusts more broadly.

The paper also outlines a number of options for reform, ranging from minor changes to the current operation of Division 6 to the introduction of a new model for the taxation of trust income.

The government will release a separate discussion paper on the appropriateness of the current definition of 'fixed trust' for public consultation early next year. This will allow the government to consider the problems with the current definition and announce its response around the middle of the year.

The due date for submissions to Treasury is 10 February 2012. If you have any comments on the consultation paper and the fact sheet, please send them to Tax Group by 16 December 2011.

Article last updated 6 February 2012