The draft statement updates and once finalised will replace interpretation statement IS 18/01 “Taxation of Trusts” which was issued in 2018. PUB 00375 includes legislative changes which have occurred since the publication of IS 18/01. The statement is a general guide as to how income derived by the trustees and beneficiaries of a trust is taxed. It also provides an overview of the various compliance obligations imposed on settlors, trustees and beneficiaries under tax law. The statement has not been updated to reflect the proposed changes to the trustee tax rate included in the Taxation (Annual Rates for 2023-24, Multinational and Remedial Matters) Bill.

According to CA ANZ, the trust concept is complex which many people do not understand. Due to the length and the technical nature of the statement, the statement may be utilised by a limited number of people e.g., specialist tax advisers. However, the interpretation statement will be an excellent reference resource. In this regard, the table of contents will be key to enable readers to efficiently navigate to the specific area that they are seeking direction/reassurance for. To assist trustees and beneficiaries understand their tax obligations, a series of simple fact sheets incorporating flowcharts and examples might be helpful.

CA ANZ suggests some aspects of the item be reviewed, amended and clarified with additional references.