Tag Archives: Tax

Tax Assured & Justified Trust

What is Tax Assured and the ATO’s justified trust program? The ATO’s Justified trust program comes originally from work done by the OECD and now implemented in Australia (and other OECD countries). Some background; in Australian we have what is called a self assessment system where we (taxpayers) work out our taxable income and send it to the Tax Office who issues an Assessment assessing the tax payable. All things being equal the ATO accepts that the numbers supplied are correct, having to conduct an audit if they suspect wrong doing.

The Justified Trust Program seeks to change this by performing what is basically an Audit of taxpayers each year in enough details that they consider that the tax position is assured or correct. Initially the Justified Trust program only applied to the top 100 Companies in Australia, it was very successful at both collecting more tax as well as lifting confidence in tax assessments so the program has now been expanded to the “next 5000” as well as private wealthy groups. The approach and regularity in these different groups varies but is underpinned by the same concepts and goals. What can you do to understand this and lower your risk?

  • The vast majority of groups are actively participating in the Justified Trust and Next 5000 programs but there are some groups who are refusing. I suggest it is in your interest to work with the Tax Office, while it is an increased burden to engage with the Tax Office it does also give you peace of mind that in the future you will not have a retrospective audit as you have already disclosed any major transactions.
  • Risks Marked to Market: There is some mis understanding of this key part of the program; once you are a TaxPayer who is large enough to be included in these programs the ATO expects you to review ATO rulings, TaxPayer alerts and Practical Compliance Guidance. This is a key way the Tax Office notifies tax payers of risk they see.
  • Keep neat records, lodge and pay on time. Seems simple but it is not always easy to achieve, late lodgement and/or payment increases the Risk rating the tax office applies to taxpayers (of all types and sizes!)

Author Alan Maddick May 11th 2022.

Trust Tax Expert

Welcome to Maddick Consulting Group, my name is Alan Maddick and I am the owner of the business. Over the years I have developed a love of tax and the laws that rule our complicated tax system. Throughout the system there is a lot of wrong information; nowhere is this more common than the area of trusts, an area I specialise in. Most Accountants and ATO staff do not have a strong understanding of the laws the underpin trust taxation, areas I can help with;

  • Unit and Investment trusts
  • Deceased estates (these are also a type of trust)
  • Minor trusts
  • Disability trusts
  • Testamentary trusts
  • Family trusts
  • Self Managed Super (these are also a type of trust)

I can explain how these trusts work and how they interrelate with your Investments and your Personal Tax position. If you need help with your trust tax issue or a second opinion please get in touch with us here

Sandringham tax

Welcome to Maddick Consulting Group, we are Tax Specialists and happy to help you with your Tax Problem. We are located in Bay Road Sandringham / Cheltenham.

We prepare tax returns for all entity types with special interests in Private Wealth, Trusts and Estate Tax. Alan Maddick the Practice Owner has worked in Tax for a number of years and has supervised the lodgement of literally tens of thousands of tax returns. There is a wide range of opinions about what the Tax Laws say; our aim is to explain what the law actually says, not what Joe from the Pub told Paul who told you. Sadly this is also how some Accountants get their tax knowledge!

Alan the practice owner grew up locally and attended Hampton Primary and Sandringham Secondary College just down the road. If you want some help with your tax work please get in touch with our Tax Experts here