Following on from articles in the AFR last weekend in which he was quoted, tax partner Jonathan Ortner has written a comment article calling on the government to simplify the family trust distribution tax (FTDT).
“For nearly three decades, the FTDT regime has sat quietly in the background. But no longer, with the Australian Taxation Office now focusing on issues that may not have attracted their attention before,” Jonathan writes.
“What was described as an ‘optional’ tax, one the government hoped would never need to be collected, has become a trap. It now ensnares ordinary families, businesses and advisers in technical breaches that carry devastating consequences. The legislation’s complexity, inflexibility and outdated concepts are causing harm far beyond its intended purpose, and it’s time for change. This is not a deterrence – it’s a paperwork tripwire.”
While the FTDT provisions ultimately need rewriting, Jonathan sets out targeted reforms that could prevent further harm immediately.
He concludes by saying: “Tax policy should support economic activity, not paralyse it. The current FTDT regime erodes trust in the system and punishes those acting in good faith. It undermines confidence in both tax law and the institutions that administer it.”
To read the full article, click here.
