Senate Economics Legislation Committee, , 7:31:42 to 7:34:41
Treasury addresses the significance of the High Court's Bendel decision regarding bucket companies and unpaid present entitlements, clarifying its relationship to the structural budget reforms.
Topics: Law reform, Integrity
Speakers: Senator Tyron Whitten, Laura Berger-Thomson, Katrina Di Marco, Senator Lisa Darmanin, Unknown Speaker
One more Was there any consideration or advice by Treasury around the High Court case that uh ruled a month after the budget that ruled that bucket companies were not subject to Division 7A rules? Oh the bucket companies that could be used to defer tax liabilities.
So can I just clarify the question? What did we provide?
Was there any consideration or advice by Treasury to the government around the High Court case that ruled a month after the budget came out?
Um in our uh in the first consultation paper that we did for trusts, um we uh did consult on that Bendel decision and sought feedback from from stakeholders on the announcement unenacted measure of the previous government.
It was a pretty pretty big announcement, was it?
The high court decision. Um certainly we were aware that that case was going through the courts. Yeah, well, yeah, obviously.
But for the budget.
Yes, so that I mean that was a I don't want to downplay the significance of that decision. That was a very significant um decision as to the kind of treatment of unpaid present entitlements. Um are you asking if that had a material impact on the there was already an announcement unenacted measure that would have dealt with that. So I I guess I'm struggling to see the link between that and and the budget budget um announcements.
But the um the decision was that around the DIP 7A rules that bucket companies could be used to defer tax liabilities. Yeah. And the budget. Yeah, yep. So and then the budget has um quickly remedy that.
Well but that decision came out after the.
And it was my question. Were there any consideration revised to Treasury around the High Court that ruled a month after?
Senator Senator, the the budget reforms were about structural changes to the taxation of trusts, consistent as the minister said with reviews over decades. The Bendel decision is sort of a separate decision around the operation of trusts. There remains sort of a lot of other laws around trusts, but the structural decisions in the budget were sort of unrelated to the fact that Bendel was sitting in the High Court, and as Ms. Berger Thomson said, I think there was an announcement on enacted measure sitting on the box from the previous government.
I'm out of time I want to hand back, but it's around the bucket companies that I believe the issue is.
Okay, thank you. Um Senator Namajum Price.