The ATO has released Taxpayer Alert TA 2016/12 cautioning against arrangements that minimise tax by, according to the ATO, create artificial differences between the taxable net income and distributable income of private trusts.
The ATO is investigating arrangements where trustees are reducing trust income to gain favourable tax breaks, or sometimes pay no tax at all.
The ATO identified these arrangements through ongoing monitoring and reviews by the Trusts Taskforce, and continues to look for these arrangements using sophisticated analytics.
The Trusts Taskforce was established to undertake targeted compliance action against people involved in tax avoidance or evasion using trusts. Since this time, the ATO has raised $772 million in liabilities and collected $164.5 million. In addition to cash collected, assets of $55 million have been restrained under proceeds of crime legislation.
For more information from the ATO website, click here.