We have had the ALP deliver the outline of their Policy on Trusts, on the weekend. It has been a good few days for the ALP
Let me start here:
"In a discretionary trust (DT) (or family trust) the beneficiaries do not have a fixed entitlement or interest in the trust funds. The trustee has the discretion to determine which of the beneficiaries are to receive the capital and income of the trust and how much each beneficiary is to receive. The trustee does not have a complete discretion. The trustee can only distribute to beneficiaries within a nominated class as set out in the terms of the trust deed."
(1)
Mr Howard as treasurer under Mr Fraser imposed a company tax rate on distributions from a DT to a person under 18 yrs. He stopped there.
(2)
Mr Costello wanted to extend that rate to ALL beneficiaries of the DT. This was the recommendation of the Ralph Review. This did not happen because, it is reported, The National Party would not accept it.
(3)
Various other treasurers looked at it, and no reported action.
(4)
July 31 2017 The ALP announce a 30% tax on distribuions from a DT. At the same time they list trusts that are exempt: Farming trusts, Testamentary trusts, charities etc.
From the failure of Mr Costello to extend the Mr Howard iniative , the creation of trusts boomed. High income earners were advised to split their income to spouses, adult relatives, children attending uni etc.....these people are allowed $18000 tax free
So all in all a good move from the ALP
The LNP could have done it, but would have accused of bowing to National Party pressure
