The trouble with trusts

This paper deals with the tax treatment of discretionary trusts (popularly known as "family trusts"), arguing that these entities are, in many ways, an ideal vehicle for income tax avoidance and putting forward a series of options to curb their use for this purpose. The federal government's promise to crackdown on trusts -- which is yet to occur -- was a core element of the agreements reached with the Australian Democrats and the Australian Labor Party to implement changes such as the GST, income tax cuts, and capital gains tax cuts -- many of which benefited high income-earners.