Trusts crack-down a Budget sleeper
One of the largest Budget impacts on the financial services industry may be a "sleeper", with the Australian Taxation Office (ATO) having received increased funding to crack-down on trust structures.
The funding will be used by the ATO to create a so-called "trusts taskforce" which will look into the use of tax avoidance and evasion strategies where trust arrangements are used to "conceal income, mischaracterise transactions and artificially reduce income and tax payments".
According to the Budget documents, the taskforce should generate additional tax collections in the order of $379 million over four years.
The Budget has directed an additional $254.8 million over the next four years towards the ATO to increase compliance crackdowns not only with respect to trusts, but on profit shifting by multinationals. The additional funding will also be used to expand data matching using third party information.
The Budget estimates the measure will result in combined additional tax collections of around $1.566 billion.
According to Deloitte, the biggest bang for the Government's buck will likely be achieved through data matching of third party data.
It said the types of income that would have strengthened reporting systems in place included taxable government grants, sales of houses and other real property, sale of shares and units in managed funds, partnership distributions, dividend payments, interest payments and income derived from options and warrants.
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