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Discretionary trusts: are they still effective?
Published on 01 May 23 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
Discretionary trusts have been a constant staple for professional advisers when arranging their tax planning and asset protection strategies. However, their utility in this respect has come into sharp focus in recent times, whether it be the wider scope given to s 100A ITAA36 to limit the use of discretionary trusts to split income, the end of sub-trust arrangements to prevent Div 7A ITAA36 from applying to unpaid present entitlements, or distributions ostensibly made within the terms of a trust deed being ruled invalid. This article explores such recent developments, including the Guardian and BBlood litigation, and PCG 2021/4 on splitting professional services income. Moreover, it aims to outline what things advisers now need to be aware of when considering whether to use discretionary trusts as part of their tax planning and asset protection strategies. From an international perspective, the article also details recent developments for Australian discretionary trusts with overseas beneficiaries.
Author profile
Mathew Brittingham CTA
Mathew Brittingham, CTA, is the Managing Director of Tributum Law, as specialist tax & trusts law advisory firm. Mathew’s broad expertise includes advising on tax avoidance, international tax, tax structuring and complex trust law issues. Mathew is also regularly called on to act for taxpayers in disputes with the ATO and State Revenue Offices, and routinely assists to resolve audits with these authorities. Mathew is consistently recognised as an industry leader in lawyer rating guides and Australian wide awards in the tax law field. - Current at 17 March 2023
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