Non-Resident Trust

The Tax Office has released a tax determination affecting the treatment of capital gains in non-resident trusts.

A non-resident trust can disregard capital gains in Australia that are non-taxable property, i.e. shares listed on the Australian Stock Exchange subject to certain conditions.

However, an Australian resident that is streamed these gains as a distribution cannot utilise any capital gains tax concessions in Australia. The income distributed to an Australian on these gains is assessed as regular income.

Also, capital gains from investments that are taxable Australian property may be streamed to Australian beneficiaries who can utilise any capital gains tax concessions.

These considerations will affect future decisions regarding the trust distributions from your trust.

For further information please contact your RCB Advisors team member.

Sources:

Australia Taxation Office – TD 2016/D4 (http://law.ato.gov.au/atolaw/view.htm?docid=%22DXT%2FTD2016D4%2FNAT%2FATO%2F00001%22)

Australia Taxation Office – TD 2016/D5 (Australia Taxation Office – TD 2016/D4 (http://law.ato.gov.au/atolaw/view.htm?docid=%22DXT%2FTD2016D5%2FNAT%2FATO%2F00001%22)