Taxation of trusts is a core element of business tax reform.
From 1 July 2001, the general principle is that trusts and companies are to be taxed alike. The spotlight has largely played on the revenue implications, on distributions by entities to members. In the new business tax jargon, this includes payment of dividends from company to shareholder and distribution of trust net income from trustee to beneficiary. But the significant other, in new entity taxation, will be the treatment of capital. Already there are new rules dealing with the distribution of capital gains from trustee to beneficiary, even though the entity taxation legislation has not yet been introduced to Parliament.