WHILE the May budget has cut back some of the tax benefits of using trusts, legislation introduced into federal parliament this week will provide much needed certainty for the 1.5 million Australians who are beneficiaries of these investment vehicles.
While there is still uncertainty around some elements of the Australian Taxation Office's aggressive approach to trusts, moves by Assistant Treasurer Bill Shorten to clarify the situation -- both through the laws put before parliament this week and his plans for further updates on the tax law around trusts -- are helping to ease some concerns.
The changes in the May budget effectively cut out the ability to use children under 18 to minimise tax distributed from a trust as from next financial year.
The amount of tax-protected income in question this financial year had risen to $3333 for children under 18 through the application of the low income tax offset.
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