Incomplete trust tax reform hampering small business
The uncertainty around the taxation of trusts is hampering the small business sector and needs to be resolved by the Federal Government in its current review of unlegislated tax and superannuation measures.
Listed accounting group Crowe Horwath has stated that the interim legislation passed by the previous Government was not a permanent solution and the current Government appears to have overlooked the issue as well.
According to Crowe Horwath, the Federal Government is reviewing 92 announced but unlegislated tax and superannuation measures but reform to the taxation of trusts, which was not completed by the 7 September Federal election, was not on the list.
Crowe Horwath national tax director Tristan Webb said the previous Government's interim measures, formulated in response to the High Court decision in the Bamford case of 2010, were only stop-gap measures. He said the current Government had committed itself to helping small business and should make trust tax reform a top order priority.
"We are surprised that the Government has indicated that it will move on 92 announced but unlegislated measures but has left reform of the taxation of trusts out," Webb said.
"Our 16,000 trust clients rightfully expect certainty in their business, farm and investment dealings. The Government should act or at least indicate the direction that they want to move so that our clients can forget about tax and get on with business."
According to Webb, the interim legislation has shown its deficiencies in the two years it has been in operation. He said the ATO had also refused to finalise a public ruling, claiming there were competing views that relate to key aspects of the legislation, each of which may be correct at law.
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