ATO targets family trust distributions

Mark Molesworth , Partner, Tax |

09 March 2020

Mark Molesworth, tax partner at advisory firm BDO in Brisbane, says: “The ATO’s focus on section 100A should concern any family group that has a trust. The provision is complex, and the ATO is pushing boundaries.

‘‘The way the ATO is looking at these matters should concern investors:

‘‘First, the tax office is asking questions about how family members choose to arrange their finances. There is a real question in my mind about how appropriate this is where one exclusion from the provision is for ‘ordinary family dealing’’.

“The provision known as ‘ordinary family dealings’’ is where the distributions are exempt from section 100A tax avoidance rules. But there is currently little guidance of what is an ‘ordinary family dealing’.

‘‘Second, the ATO is now calling into question standards of behaviour that have previously been walked past. At a minimum, taxpayers need to be made aware of the change of view.”

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