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ATO points trust distribution weapons at wrong target


The ATO is gunning for the wrong target in its s100A approach because the authors of the law never intended it to apply to families, says Tim Munro, CEO of Change Accountants and Change GPS.

By Philip King 8 minute read

Mr Munro spent three weeks trawling through Hansard from 1978–79 to examine the origins of the trust distribution law.

“I disagree with the approach the ATO have taken with the application of section 100A,” Mr Munro said on this week’s Accountants Daily podcast.

“It was introduced to stop someone, say a property developer, who made $10 million in profits, finding someone else not in the family with a loss company or trust and saying, ‘Can I put my profits through your losses? I’ll give you $1 million and I’ll keep $9 million’.”

“That is your classic reimbursement agreement. I can filter my profits through, take it out tax free, I reimburse you $1 million bucks, and we’re both better off.

“That’s why this was put into place.”

Note: This podcast was recorded before the ATO released PCG 2023/1 on work-from-home deductions.


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