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ATO Halloween ruling unmasked

ATO Halloween ruling unmasked

KPMG’s Hayley Lock examines Taxation Ruling TR/2018/7 which covers the Commissioner of Taxation’s view of how the tax law applies to certain employee remuneration trusts.

Hayley Lock

Partner, People Services

KPMG Australia


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After a gestation period of more than four years, on 31 October, the Commissioner of Taxation released the final version of Taxation Ruling TR/2018/7, covering the Commissioner’s view of how the tax law applies to certain employee remuneration trusts (“ERT”).

The best piece of news comes on the first page, where the ruling confirms that trusts used in employee share schemes covered by Division 83A of the Income Tax Assessment Act 1997 are outside of its scope. This was not so clear in the first draft of the ruling issued in 2014.

Further good news comes in the form of a clear statement that a fringe benefit cannot arise from a step (such as a contribution to an ERT) in a series of steps whose objective is to deliver salary and wages to employees.

However that’s about where the good news ends.

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