NO.095
Taxing Trusts Like Companies and Simplified Imputation Rules - Exposure Draft
Legislation
The Government is releasing an exposure draft of legislation to tax certain trusts like
companies with effect from 1 July 2001.
This legislation will implement the Government’s policy, which was announced in A
New Tax System, of introducing greater consistency in the taxation of entities.
There has been extensive consultation in the development of this legislation. The
exposure draft will provide further opportunity for comment on the operation of the new
arrangements. The exposure draft legislation also covers the simplified imputation system
and franking credits for foreign dividend withholding tax, and an accompanying explanatory
statement.
The proposed legislation for taxing trusts like companies achieves the objective of
greater consistency in the taxation of entities while minimising compliance and
restructuring costs. Under this approach, non fixed trusts will be taxed like companies.
Broadly, companies, fixed trusts, limited partnerships and co-operatives will retain their
current tax treatment. This approach removes the requirement for the introduction of a
collective investment vehicle regime.
The draft explanatory statement which accompanies the exposure draft outlines the areas
where further legislation will be introduced to complete the Government’s announced
policy.
The release of exposure draft legislation provides the opportunity for additional
comment on the proposed law and is a further demonstration of the Government’s
commitment to a high level of community involvement in the implementation of its tax
reform agenda. The exposure draft can be obtained from the Treasury internet site (www.treasury.gov.au/businesstax) and
the ATO web site (www.ato.gov.au).
To facilitate introduction of the legislation into Parliament, comments on the exposure
draft should be received by 3 November 2000.
Comments should be sent to:
Assistant Commissioner
Law Design and Development (Entities)
PO Box 900
Civic Square ACT 2608
CANBERRA
11 October 2000
Contact: Peter Mullins (ATO)
(02) 6216 2805
or Haydn Daw (ATO)
(02) 6216 2031
Mike Buckley (Treasury)
(02) 6263 4413 |