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Friday, 22 February 1985
Page: 85

Mr KEATING (Treasurer)(3.27) —I move:

That the Bill be now read a second time.

This Bill will formally impose a tax, to be called trust recoupment tax, on the taxable amount determined in accordance with the rules being inserted in the trust recoupment tax legislation by the Bill I have just introduced. As I explained in my second reading speech on that Bill, liability for the trust recoupment tax will, subject to election arrangements, fall initially on the trustee of the stripped trust, but where it is impracticable or inappropriate to levy the tax at that primary level it will be possible to levy the tax at the secondary level on the class of persons who are referred to in the legislation as the eligible beneficiaries class.

This Bill imposes on the taxable amount at either the primary or secondary level a trust recoupment tax equal to 60 per cent of the taxable amount. In addition, the Bill imposes tax on taxable amounts described in the legislation as elected taxable amounts and company taxable amounts. These taxable amounts may arise where the beneficiaries of a stripped trust elect to be assessed to income tax on the stripped income and one of those beneficiaries is a company. The rate of tax will be 75 per cent on elected taxable amounts and 46 per cent on company taxable amounts, the former rate applying where the shareholders of the company do not elect to be taxed on deemed dividends. I commend the Bill to the House.

Debate (on motion by Mr N. A. Brown) adjourned.