Finance minister Michael Cullen said yesterday that the tax leakage through Australian unit trusts (AUT) is so great that the government is prepared to enact an interim solution “as soon as practicable.”
Saturday, March 6th 2004, 12:45AM
by The Landlord
"I am advised that a significant and growing amount of investment is now flowing into these (AUT) structures, giving rise to a serious base maintenance concern. If officials can develop an interim solution to plug this leak, the government will be recommending it for enactment as soon as practicable," he said in a speech to the International Fiscal Association conference last night.
Last year an officials paper was released which looked at options for dealing with this issue.
There has been some uncertainty about whether the paper was looking at just the AUT issue of the wider issue of tax treatment of managed funds.
Cullen said last night the work in dealing with taxation of offshore investment has a greater chance of success if it is considered along with domestic investment.
“This inevitably means that any offshore solution cannot be applied from the 2005-06 year. I am prepared to accept this delay on the basis that an interim solution is enacted to deal with the Australian unit trust issue. “ The officials paper on this tax issue suggested two options.
