• Introduction

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    These instructions will help you complete the Trust tax return 2015. They are not a guide to income tax law. You may need to refer to other publications.

    When we say you or your business in these instructions, we mean either you as the trust that conducts a business, or you as the registered tax agent or trustee responsible for completing the tax return.

    These instructions contain abbreviations for names or technical terms. Each term is spelt out in full the first time it is used and there is a list of abbreviations.

    What’s new?

    Small business concessions: changes to simpler depreciation rules

    New laws have passed that allow small businesses to claim an immediate deduction for depreciating assets they acquire, and start to use or install ready for use, provided the asset costs less than $20,000. The general small business pool will apply to depreciating assets costing $20,000 or more. This measure applies to assets acquired from 7.30pm (AEST) on 12 May 2015 until 30 June 2017.

    The current ‘lock out’ laws have also been suspended. Small business entities that have previously elected out of the simplified depreciation rules are no longer subject to the ‘lock-out’ rule (which prevented small businesses from re-entering the simplified depreciation regime for five years if they had opted out). These entities may re-elect to use the simplified depreciation rules, now with the higher $20,000 threshold.

    See also:

    Accelerated depreciation for primary producers

    New laws have passed that allow primary producers to:

    • immediately deduct the cost of fencing and water facilities
    • depreciate over three years the cost of fodder storage assets.

    See also:

    A new tax system for managed investment trusts

    In the 2010–11 budget, the government announced the intention to introduce a new tax system for Australian managed investment trusts (MITs) in response to the Board of Taxation’s review of MIT tax arrangements.

    On 13 May 2014, the government announced that

    • the start date of the new tax system would be deferred until 1 July 2015, and
    • MITs, and other trusts treated as MITs, will be able to choose whether to apply the interim trust streaming changes to the 2014–15 income year.

    The new system proposes the following:

    • allowing eligible MITs to use an attribution method of taxation (in lieu of the existing present entitlement to income method)
    • including a rule to allow MITs to carry forward under- and over-distributions into the next income year, without adverse taxation consequences
    • deeming as fixed trusts those MITs that meet eligibility requirements
    • allowing unit holders to make, in certain circumstances, adjustments (including upward) to the cost base of their unit holdings to eliminate double taxation that may otherwise arise
    • introducing an arm’s length rule that aims to ensure that related entities undertake transactions between one another in a manner that reflects commercial dealings
    • amending the 20% tracing rule for public unit trusts so it does not apply to super funds and exempt entities that are entitled to a refund of excess imputation credits.

    At the time of publication, these changes had not become law.

    See also:

    Some deceased estates not required to lodge a tax return

    A trust tax return does not have to be lodged for a deceased estate if:

    • the deceased person died less than three years from before the end of that income year
    • no beneficiary is presently entitled to a share of the income of the trust estate at the end of that income year
    • the net income of the trust estate under section 95 of the Income Tax Assessment Act 1936 is less than $18,200 for that income year
    • there are no non-resident beneficiaries of the trust estate during the income year.

    General information

    Australian Business Register

    We are authorised by the A New Tax System (Australian Business Number) Act 1999 and other taxation laws to collect certain information relating to your entity. We may use business details supplied on the tax return to update the information held in the Australian Business Register (ABR) in relation to your entity. This may include cancelling the ABN if your entity is no longer entitled to be registered in the ABR.

    Where authorised by law, selected information on the ABR may be made publicly available and some may be passed on to other Commonwealth, state, territory and local government agencies. These agencies may use ABR information for purposes authorised by their legislation, or for carrying out other functions of their agency. Examples of possible uses include registration, reporting, compliance, validation and updating of databases.

    You can find details of agencies that regularly receive information from the ABR at abr.gov.auExternal Link or you can phone us on 13 92 26 between 8.00am and 6.00pm Monday to Friday to have a list of the agencies sent to you.

    See our privacy statementExternal Link for more information about:

    • privacy
    • the information we collect
    • how it may be used.

    Foreign exchange gains and losses

    Under the foreign exchange (forex) measures contained in Division 775 and the general translation and functional currency rules contained in Subdivisions 960-C and 960-D of the Income Tax Assessment Act 1997 (ITAA 1997), forex gains and losses are generally brought to account as assessable income or allowable deductions when realised. The forex measures cover both foreign currency denominated arrangements and, broadly, arrangements to be cash-settled in Australian currency with reference to a currency exchange rate. Forex gains and losses of a private or domestic nature, or in relation to exempt income or non-assessable non-exempt income, are generally not brought to account under the forex measures.

    If a forex gain or loss is brought to account under the forex measures and under another provision of the tax law, it is generally assessable or deductible only under the forex measures. However, if a financial arrangement of a trust is subject to the taxation of financial arrangements (TOFA) rules, forex gains and losses from the financial arrangement will generally be brought to account under those TOFA rules instead of the forex measures.

    Additionally, forex gains and losses will generally not be assessable or deductible under the forex measures if they arise from certain acquisitions or disposals of capital assets, or acquisitions of depreciating assets, and the time between the acquisition or disposal and payment is no more than 12 months. Instead, any forex gain or loss is usually matched with or integrated into the tax treatment of the underlying asset.

    The general translation rule requires all tax-relevant amounts to be expressed in Australian currency regardless of whether there is an actual conversion of that foreign currency into Australian dollars.

    The tax consequences of forex gains or losses on existing foreign currency assets, rights and obligations that were acquired or assumed before 1 July 2003 are determined under the law as it was before that date unless:

    • you have made a transitional election that brings these arrangements under the forex measures, or
    • there is an extension of an existing loan (for example, an extension by a new contract or a variation to an existing contract) that brings the arrangement within these measures.

    See also:

    Last modified: 21 Jan 2016QC 44346