Tax & ATO News Australia

Unpacking The ALP's Proposed Trust Distributions Tax

Whatever you think about the fairness of the ALP’s proposed trust distributions tax [see link here] there is no doubt it creates a whole range of questions.

For fear of giving too much away in a (reasonably) public forum, I am not going to give the ATO and the potential future government a free kick by outlining in detail all of the gaps, overlaps and plain mistakes that are inherent in the ALP’s policy document. After all, it is only an outline at this stage, subject to ATO consultation. Who knows, they might get it all right.

But I doubt it.

What is clear, from their track record [see mining tax] is that a tax policy driven out of a perceived sense of public fairness is riven with the law of unintended consequence. It will inevitably create extensive planning opportunities for those accountants (and tax lawyers) that the ALP seem to dislike, and it will also create situations that are manifestly unfair in operation.

Both parties would do a lot better to dust off the Ralph Review and approach the taxation of entities comprehensively, rather than trying to snatch some cheap headlines to be seen to be doing something that the other side is not. That is no way to make tax policy.
 

Posted in: Tax & ATO News Australia at 17 August 17

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Tax & ATO News Australia

Author: David Hughes

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