ATO update on section 100A

May 25, 2022

The ATO has issued an update on draft guidance on trust reimbursement agreements and unpaid present entitlements.

ATO Deputy Commissioner Louise Clarke makes two key points in the release.

  1. If the beneficiary of the trust gets the benefit, section 100A has no role to play. The ATO is not concerned about ordinary family trusts where the relevant family members benefit from the distributions.
  2. The ATO is not concerned when profits from the family business are distributed to members of the family who work in the management of the business and then that family member chooses to reinvest the profits in the business.

The ATO also reassures the tax adviser community that the ATO “won’t have a retrospective element”. It states that the ATO will not be pursuing taxpayers that entered into arrangements between 1 July 2014 and 30 June 2022 where, in good faith, they concluded that section 100A did not apply to them based on the previous 2014 guidance.