A complete guide to taxation of trusts - Learning Manual

• Identify the reasons why trusts are used as business and investment vehicles
• Describe how trusts are taxed and when trustees or beneficiaries will be assessed on net income derived by the trust including related planning opportunities in strategically streaming capital gains and franked distributions to certain beneficiaries
• Recognise the issues that can arise when a trust applies the CGT discount or the small business CGT concessions in respect of a corporate beneficiary
• Describe how unpaid present entitlements owed to a corporate beneficiary can be structured to prevent a deemed dividend arising under Division 7A
• Recognise when a family trust election needs to be made and the impact it will have on a trust for the purposes of recouping trust losses, recouping a subsidiary company’s tax losses, passing franking credits to beneficiaries, complying with trustee beneficiary reporting and satisfying the small business restructure rollover provisions
• Identify when each specific CGT event applicable to trusts may apply and understand the planning opportunities
• Identify the income tax and CGT advantages of using a testamentary trust
• Determine when an interest deduction can be claimed by a trustee on funds borrowed to finance a payment to a beneficiary
• Recognise when specialist advice will be needed to determine whether a resettlement has occurred, and the potential impact of such a resettlement for CGT and income tax purposes

This learning manual is for tax practitioners with responsibility for the preparation of income tax returns for individuals and businesses involving trusts.