Contact: Jane Kneebone
Corporate Affairs & Communications
Deloitte
Tel: +61 (0) 3 9208 7389
Mobile: 0416 148 845 The Government’s recent announcement that it will abolish the trust cloning tax concession, will have a significant impact on private businesses, according to professional services firm Deloitte. Trust cloning involves creating a trust which had the same terms and beneficiaries as an original trust and transferring a capital asset to the cloned trust free without potentially triggering capital gains tax. However the rules have now changed. “This announcement means that if a private business wants to transfer a capital asset from a trust to another trust for asset protection or family succession reasons, then a CGT liability may eventuate. In the past, a CGT exemption was potentially available when a capital asset was transferred to a cloned trust provided it had the same terms and beneficiaries as the original trust,” said Deloitte Tax Partner, Craig Holland. “The ATO has been concerned that taxpayers were seeking to apply the trust cloning concession without fully understanding all the technical matters relevant to obtaining the concession. Treasury has decided to remove the concession given the uncertainty surrounding the application of the rules which have created significant compliance and administration costs for taxpayers and the Tax Office. “Basically private businesses, operating through trust structures and wanting to move a capital asset from one trust to another for asset protection reasons or as part of a family succession, may now need to look at other options. Some of these options may result in a tax liability,” added Mr Holland. Craig Holland
Partner
Deloitte
Tel: +61 (0) 3 9208 7586 |
