BUDGET: ATO Taskforce to Target Trust Misuse
15 May 2013 at 9:34 am
The Federal Government will provide the Australian Tax Office with $67.9 million to target the use of complex tax structures by high net worth individuals to avoid tax.
The funding was announced in the Federal Budget to allow the ATO to target the exploitation of trusts to conceal income, mis-characterise transactions and artificially reduce trust income amounts to avoid or reduce tax.
"It is important that the ATO has the appropriate resources to tackle tax avoidance through complex structures like trusts," Assistant Treasurer, David Bradbury said.
"Emerging evidence, including substantial ATO data from two recent law enforcement operations, shows a significant increase in the level of trust-based non-compliance."
“The ATO will target the use of contrived loan arrangements and the promoters of tax avoidance and evasion schemes. The ATO will report regularly to the Government on the types of misuse it is uncovering.
“This compliance work is expected to result in a net gain to revenue of $311.1 million over the forward estimates.
“The Government will also use intelligence gathered by the ATO to inform the next phase of its consultation on trust taxation reform.
"The Government has received a wide range of views on how the tax law could be amended to reduce complexity and compliance costs and ensure that opportunities for manipulation of tax liabilities are minimised. The message from stakeholders is that there is no clear consensus on the best approach to deal with these issues.
“I have therefore asked Treasury to consult with the ATO's National Tax Liaison Group (NTLG) Trust Consultation Sub-group on the most appropriate way to progress the reform, and in particular to address integrity concerns arising from the mismatch between trust and tax concepts of income,” Bradbury said.
"The NTLG is well placed to advise the Government on these issues with its membership spanning a broad spectrum of accounting and legal bodies, many of which made submissions on the October 2012 policy options paper", he said.
It is expected that Treasury will report back to Government on the outcomes of the consultation by the end of July 2013.
The Federal Budget papers can be downloaded at http://www.budget.gov.au/2013-14/index.htm