Handbook

The trust is a major form of vehicle used for holding investment assets, for transferring family wealth to future generations and for income splitting. In addition, fixed public trusts, which are now commonly known as public unit trusts, funds or ‘collective investment vehicles’, have become a major form of public investment vehicle. Most superannuation funds are, in fact, trusts. 

The trust is not a distinct legal entity and is not taxed as a separate entity. The primary rule is that the beneficiary under a trust is subject to tax. Only where the beneficiary is not subject to tax will the trustee be assessed to pay tax. This course is mainly concerned with establishing when the primary rule applies, and when it is displaced by the exceptional rules. 

An understanding of the specific tax treatment of trusts is important to any student setting out to acquire, or refine, an understanding of the Australian tax system. 

The study guide for Taxation of Trusts comprises the following seven modules: 

1. Introduction and overview of trust law;
2. Taxation of income of trusts (Division 6 of the Income Tax Assessment Act 1936 (Cth));
3. Application of the CGT rules to trusts, including streaming
4. The trust loss measures and family trust elections;
5. General anti-avoidance and other integrity measures;
6. Accounting practice in relation to trusts;
7. The rules for taxing widely held trusts: Managed Investment Trusts and Attribution Managed Investment Trusts.