In the 1997-98 Budget, I announced that the Government would review the taxation of trusts and as part of that process, the Treasury and the Australian Taxation Office would release a discussion paper. Two other officials papers were also foreshadowed: an information paper on the taxation treatment of limited partnerships; and a review of the taxation treatment of friendly societies and the life insurance business of life insurance companies.
Since that time, the Prime Minister has announced a far broader tax reform process. This process is part of the Governments plan to reform and modernise the Australian tax system for the 21st century.
The Government considers that taxation reform should take an integrated approach to the entire business sector. As a result, all three reviews will now proceed as part of the Governments tax reform program instead of by way of officials discussion papers.
The Government is commited to developing taxation arrangements for all sectors and business vehicles including trusts, life insurance and limited partnerships that will develop a fairer, better and more modern taxation system.
Addressing the taxation of trusts in the context of broader tax reform will allow a wider consideration of arrangements appropriate for modern business whilst at the same time ensuring particular vehicles do not permit undue tax minimisation by any taxpayer, including high wealth individuals.
As I announced in the 1997-98 Budget, the Government reserves the right to take earlier legislative action to prevent tax minimisation or avoidance by the use of trusts or limited partnerships.
Interested parties that would have participated in the consultation process on the discussion papers are invited to forward submissions to the Chair of the Tax Consultative Task Force, Senator the Hon Brian Gibson for consideration in the context of wider tax reform. Submissions should be addressed to:
Senator the Hon Brian Gibson
Chairman, Tax Consultative Task Force
Room S1 96, Parliament House
CANBERRA ACT 2600
Submissions on these issues will be received up until 31 March 1998. Submissions on other matters close on 27 February 1998.