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Draft taxation determinations TD 2019/D6 and TD 2019/D7
Technical article

Draft taxation determinations TD 2019/D6 and TD 2019/D7

The Commissioner of Taxation has provided Pitcher Partners the opportunity to comment on two Draft Taxation Determinations (TD 2019/D6 and TD 2019/D7). The full submission is available below.

What are the Draft Taxation Determinations about?

TD 2019/D6 and TD 2019/D7 asks how the current tax legislation operates where a capital gain made by a resident trust (or a trustee of such a trust) is distributed to a non-resident beneficiary of the trust.

Why are we submitting comment?

Pitcher Partners has a client base that includes closely and privately held groups that often include trusts.  If these Draft Taxation Determinations are finalised, they will have a material effect on these groups.

What have we said in our submission back to The Commissioner of Taxation?

We have suggested that in their current form the Draft Tax Determinations are not consistent with Australian tax policy and that an existing limitation within the current legislation should be applied so that non-resident beneficiaries of resident trusts are not assessed on foreign sourced capital gains of a resident trust.

If the Commissioner does not apply this suggestion, we have proposed that an administrative practice be put in place to allow non-resident taxpayers certainty in accessing tax refunds, and, rather than applying the rulings in a retrospective manner, that the application date should be set allowing sufficient time for the Government to consider legislative change to clarify the ongoing operation of the law.

To read the full response made, you can access a full copy of the submission by clicking here.

This content is general commentary only and does not constitute advice. Before making any decision or taking any action in relation to the content, you should consult your professional advisor. To the maximum extent permitted by law, neither Pitcher Partners or its affiliated entities, nor any of our employees will be liable for any loss, damage, liability or claim whatsoever suffered or incurred arising directly or indirectly out of the use or reliance on the material contained in this content. Pitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. Liability limited by a scheme approved under professional standards legislation.
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