The Assistant Treasurer has released a discussion paper which examines the appropriateness of establishing a tax advice privilege for independent professional accounting advisers similar to the way legal advice is privileged.

The paper considers an Australian Law Reform Commission recommendation to shield certain tax advice documents from the information-gathering powers of the Commissioner of Taxation and the implications of establishing such a privilege.

The Assistant Treasurer, the Hon Bill Shorten MP, has released for public consultation two sets of exposure draft legislation: firstly to permit beneficiaries to continue to use the primary production averaging and farm management deposits provisions in a loss year and secondly to enable the streaming of capital gains and franked distributions as well as changes to ensure that low tax entities, especially exempt entities, cannot be used inappropriately to reduce the tax payable on the taxable income of a trust.

The Government will defer consideration of the proposal to better align the concept of ‘income of the trust estate’ with ‘net income of the trust estate’ to the broader update and rewrite of Division 6 of Part III of the Income Tax Assessment Act 1936 (Division 6).

But the Government will introduce specific anti‑avoidance rules to target the use of low tax entities, especially exempt entities, to reduce the tax payable on the taxable income of a trust.

The exposure draft legislation introducing the streaming of franked distributions and capital gains as well as the targeted specific anti‑avoidance rules is substantially, but not fully complete.

Submissions close by 29 April 2011, to allow the introduction of the measures in the Winter sittings of Parliament.

The Treasurer has announced that a Tax Forum will be held at Parliament House in Canberra on Tuesday October 4 and Wednesday October 5.

The forum will include sessions to discuss personal tax, transfer payments, business tax, state taxes, environmental and social taxes, and system governance and other matters arising from the Tax System Review.

The Government has made it clear that an increase in the GST is not on the agenda.

The Assistant Treasurer has released a discussion paper for public consultation about two recommendations from the Board of Taxation that addresses two key areas of uncertainty for trusts:

•Better align the concept of ‘income of the trust estate’ with ‘net income of the trust estate’
•Enable the streaming of capital gains and franked distributions.

The changes will apply for the 2010-11 and later income years.

The Assistant Treasurer and Minister for Financial Services and Superannuation, has released a discussion paper on the design and scope of the standard tax deduction which was announced in the 2010-11 Budget.

The standard deduction (not requiring proof of work-related expenses) will be $500 for 2012-13, rising to $1,000 for 2013-14 and subsequent years.

Taxpayers whose claims for these expenses exceed the standard deduction will still be able to claim those deductions.

The closing date for submissions is 8 April 2011.