Effective 1 July 2017, the new Common Reporting Standard (“CRS”) will apply, and many Australian trusts may need to report the financial details of their beneficiaries to the ATO. CRS is a global financial information collection, reporting and exchange for foreign tax residents. The information collected will be shared with participating overseas countries (i.e. U.S. and U.K). The aim here is to ensure Australian resident financial accounts can be verified with overseas countries and therefore help to avoid tax evasion. The first report will be due to the ATO on 31 July 2018, and the financial data will be exchanged with the participating countries on 30 September 2018. To comply with these regulations and effectively navigate this complex landscape, it is advisable to consult accountants in Sydney who are well-versed in CRS requirements and can offer guidance tailored to your specific circumstances.
In summary, the implications of CRS on your trust are:
- On request by the ATO, your trust will be required to provide financial details of the beneficiaries;
- The reporting obligation could be imposed on the trust or the trustees of the trust;
- Not only will the financial details of the beneficiaries go to the ATO, but they will also be shared with other participating countries;
- There is no minimum size or threshold for reporting;
- If the trust or trustee(s) fails to comply, the ATO will impose penalties.
If you have any questions or want to know more, please do not hesitate to contact us.
Kreston Stanley Williamson Team
*Correct as of June 2017
Disclaimer – Kreston Stanley Williamson has produced this article to serve its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas in this article, you must seek advice about your circumstances. Liability is limited by a scheme approved under professional standards legislation.