As Tax Partner Clint Harding writes in the Weekly Tax Bulletin, a recent Federal Court decision regarding the taxation of non-taxable Australian property distributions made by the trustee of an Australian discretionary trust to a non-resident beneficiary provides welcome clarification around an issue that has been the cause of much friction between taxpayers and the Commissioner.
On 28 April 2020, the Federal Court released its decision in Peter Greensill Family Co Pty Ltd (trustee) v FCT [2020] FCA 559. The decision reinforces the Commissioner's view as set out in Draft Taxation Determination TD 2019/D6, that Div 855 of the ITAA 1997 does not disregard non-taxable Australian property capital gains distributed to non-resident discretionary beneficiaries.
In the article published by Thomson Reuters, Clint argues that although the Greensill decision provides some clarification, it is simply one more issue that must be fixed amongst a “host of other international tax issues that are unsatisfactory from a policy perspective.”
“Australia's quagmire of policy settings around the cross-border taxation of capital gains, particularly those circumstances that involve gains flowing through trusts (domestic or otherwise), make it incredibly difficult for taxpayers, and for experienced advisers, to understand and comply with their tax obligations.”
To read the full article, click here.
