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Coalition, Labor concede concerns over 100A

Both parties will aim to address “unintended consequences” from the ATO’s interpretation of the trust law.

Tax&Compliance Philip King 01 April 2022
— 2 minute read

The groundswell of concern over the ATO’s reading of section 100A has resulted in both sides of politics promising to address the issue after the election.


The commitments, by the Assistant Treasurer and his Labor counterpart, come after accounting bodies have been inundated with feedback from members about the “retrospective” nature of the ATO’s draft 100A ruling and its interpretation of “ordinary family and commercial dealings”.

CA ANZ tax leader Michael Croker said the level of concern exceeded any previous issue and the frustration was clearly filtering through to Canberra.

“We’re getting lots of phone calls, he said. In the feedback we get from our members, quite a few of them have said they would also be contacting the Treasurer’s office. And it’s clear that some have contacted the shadow assistant treasurer’s office as well.”

Both Assistant Treasurer Michael Sukkar and his shadow counterpart Stephen Jones were put on the spot during a post-budget webcast when Mr Croker asked if either would consider a policy solution to the problem.

Mr Sukkar said the government was looking at 100A “very closely” and would “encourage the independent ATO to arrive at sensible outcomes for taxpayers”.

“I am very well aware of the issues associated with s100A and the interpretations of the ATO,” he said.

“Any change of interpretations that has an adverse impact on legacy structures and legacy transactions we would be minded to address.

“And to remove some of the unintended consequences of that change in interpretation … we’re minded to address however we need to.”

He said that could involve legislation if it could not be achieved administratively, but backed away from a “rock-solid commitment”.

Shadow assistant treasurer Mr Jones said Labor was also aware of the issue and had been receiving correspondence on it.

He said the ATO should be able to operate independently, but there were limits.

“If the interpretation, administration and application of the act has moved beyond that and ventured into the territory of retrospective legislation, then obviously we would want to do something about that,” he said.

“We will work with the profession and stakeholders if we think the ATO has moved into retrospective legislation.”

Mr Croker welcomed the commitments and said both parties were indicating that they understood trusts were used by families and businesses.

“They are indicating that they don’t like retrospective outcomes,” he said, “and they will look closely at the ATO guidance and see whether the ATO is straying into policymaking.”

But he said a post-election remedy meant months in which worried accountants were unsure how to advise clients.

“There’ll be a continuing state of uncertainty because this is starting to look like a political issue,” he said.

The ATO would probably go into caretaker mode during the election campaign and not rock the boat.

“In the meantime, youve got people in the accounting world trying to advise their clients on what to do about unlodged 2021 tax returns, and what to do about trust resolutions and distributions for the year which is about to end,” Mr Croker said.

Everyones in a bit of a flap.”

The ATO has extended the deadline for submissions on the matter from 8 April to 29 April, and Mr Croker said it is going to get a heap of submissions.

They will be left in no doubt about the level of concern,” Mr Croker said.

Coalition, Labor concede concerns over 100A
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Philip King

Philip King

Philip King is editor of Accountants Daily and SMSF Adviser, the leading sources of news, insight, and educational content for professionals in the accounting and SMSF sectors.

Philip joined the titles in March 2022 and brings extensive experience from a variety of roles at The Australian national broadsheet daily, most recently as motoring editor. His background also takes in spells on diverse consumer and trade magazines.

You can email Philip on: This email address is being protected from spambots. You need JavaScript enabled to view it.