The End of Asset Revaluation Reserve Distributions? An Analysis of the Government’s Latest Attack on Discretionary Trusts Performing Asset Revaluation Reserve Distributions.
Australian Tax Review, Vol. 33, No. 3, pp. 150-167, September 2004
4 Pages Posted: 24 Oct 2009 Last revised: 23 Nov 2015
Date Written: September 1, 2004
Abstract
On 19 February 2004 the Government finally introduced its proposed amendment to s 109UB of Div 7A of the Income Tax Assessment Act 1936 (Cth) in response to the Board of Taxation’s recommendations. The Board had recommended amendments to improve the section’s fairness and to address the practice of asset revaluation reserve distributions, circumventing the section’s application. So, does the Government’s amendment successfully address the Board’s concerns, especially since the Government did not adopt the Board’s own proposed solutions? This article will outline the reasons for the Board’s original recommendations and the Government’s response. It will then critically review the amendments, focusing on its application to asset revaluation reserve distributions circumventing Div 7A’s operation.
Keywords: s 109UB, Div 7A, asset revaluation reserve distributions, discretionary trust
JEL Classification: K34
Suggested Citation: Suggested Citation