Trust Compliance With Anti-avoidance Rules

Is your trust complying with anti-avoidance rules?

Is your trust compliant with anti-avoidance rules - image
Is your trust compliant with anti-avoidance rules?

The ATO advised recently that it is reviewing selected trusts’ compliance with anti-avoidance rules under S 100AA and 100AB of ITAA 1936.

The purpose of anti-avoidance rules

These anti-avoidance rules are designed to prevent trustees using tax-exempt entities to shelter the trust’s net income.

The ATO is looking at situations where a tax-exempt entity is:

  • entitled to income of the trust estate and
  • has not been paid or notified of that entitlement within two months of the end of the income year and
  • their share of the trust’s net income is disproportionate to their entitlement to trust income.

How will I know if my trust is under scrutiny?

The ATO will send out letters to selected tax agents to review certain trustee clients’ affairs.

If you are concerned about trust compliance issues, please contact the Chartered Accountants at our Epping Office on (02) 9871 3429

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