Further to our previous Gilbert + Tobin Tax Update from March 2011, the Assistant Treasurer Bill Shorten MP announced during a speech to the Institute of Chartered Accountants on 6 April 2011 that the Government has deferred the proposal to align the trust law concept of "income of the trust estate" with the tax law concept of "net income of the trust estate".
In his speech, the Assistant Treasurer stated:
"The overwhelming feedback is that you would like the issue of streaming of capital gains and franked distributions resolved in the short term but you consider that aligning the concept of income of the trust estate with the net income of the trust estate should be addressed as part of the broader review of trusts.
The Government is hearing your counsel and will roll the trust income issue into the broader review to make sure that we get the solution right."
No timeframe for adoption of either of the measures was announced. Under the original announcement in the Press Release dated 4 March 2011, both of the measures were intended to commence from 1 July 2010 for 30 June balancing trusts.