Trust Taxation – the saga continues...
The Federal Government have finally released their consultation in relation to the proposed minimum tax to be imposed on trusts (discretionary trusts) that was originally flagged in the May Budget.
Below we have summarised the main points of the consultation paper noting that there is often a long way to go between a consultation paper and legislation, however, given the Governments majority and eagerness to effect reform, it should be anticipated that some changes will materialise into real legislation.
Trusts Subject to Tax
The consultation paper identifies on discretionary trusts (albeit that it acknowledges that this term needs to be better defined) as the trusts that the minimum tax will apply to whilst confirming that certain exclusions will be available (eg primary production income).
Testamentary trusts are also to be excluded (following a last minute about face from the Federal Government), however, its not all plain sailing on that front as the exclusion appears to be limited to testamentary trusts where only individuals and income tax entities can benefit.
