The Final ATO Ruling Affecting Trust Distributions

The Final Ato Ruling Affecting Trust Distributions Element

The ATO has finalised the section 100A ruling, which provides guidelines and a compliance approach to trust distributions. In essence, the ATO is concerned that the adult beneficiary who’s been made entitled to a trust distribution does not enjoy the economic benefit. More importantly, section 100A also focuses on taxpayers that enter into an arrangement that is not considered ordinary family or commercial dealing but merely a scheme to seek a tax benefit.

The ATO’s compliance approach uses three colour zones to determine whether the arrangement is Low or High risk. There are White (Low), Green (Low) and Red (High) zones. 

The ATO made many available examples of what arrangements would be considered low or high risk.

We will discuss how section 100A will impact our clients during tax planning and whether their existing arrangements are in the White, Green, or Red zone.

If you’re keen to explore changing accountants, we have a non-obligation process to do that. The first step is booking a strategy call with one of our accounting team. It’s a free 20-minute zoom or phone call where you get to meet us to manage your questions. 

From that point, you can consider doing a “Look Under The Hood” with us. There is no obligation to change accountants, but we give you a second opinion if you’re paying too much tax. 

Throughout that process, we can identify any problems we see with your current setup. Anything that your current accountant hasn’t claimed, or tax you may have overpaid, and strategies of how we might fix that going forward. We can run through with you once you book with us. 

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