Justice and the Australian income tax base taxing capital gains and trusts John Minas and Sonali Walpola
By: Minas, John
.
Contributor(s): Walpola, Sonali.
Material type: 
ArticleSubject(s): JUSTICIA | IMPUESTO SOBRE LA RENTA DE LAS PERSONAS FISICAS | PLUSVALIAS | SISTEMA FISCAL | CONTRIBUYENTES | AUSTRALIA
In:
Australian Tax Forum: a journal of Taxation Policy, Law and Reform v. 40, n. 3, 2025, p. 311-336Summary: In Australia, a tax preferential status is afforded to personal capital gains and trusts. The Australian approach to taxing the capital gains of personal taxpayers is deficient when evaluated on criteria related to justice and a sustanaible tax base. The capital gains tax (CGT) base is unjustifiably narrow, and the major CGT concession- the 50% CGT discount - mainly benefits high wealth individuals. The availability of the 50% CGT discount in the trusts setting compounds wealth and tax inequity issues in Australia. Trusts already have a tax-advantaged status owing to the fundamental basis upon which they are taxed in Australia. In this article, we consider the policy measures that entrenched the current inequities in these two areas of the Australian tax system and the options for reform. Against a background of growing wealth inequality and housing unaffordability, we propose three major tax reforms: a complete abolition of the 50% CGT discount for individuals and trusts, a restrictions of the CGT main residence exemption, and entity taxation for trusts, combined with special measures to annihilate the tax attractions of discretionary trusts.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| Artículos | IEF | IEF | OP 1867/2025/3-2 (Browse shelf) | Available | OP 1867/2025/3-2 |
In Australia, a tax preferential status is afforded to personal capital gains and trusts. The Australian approach to taxing the capital gains of personal taxpayers is deficient when evaluated on criteria related to justice and a sustanaible tax base. The capital gains tax (CGT) base is unjustifiably narrow, and the major CGT concession- the 50% CGT discount - mainly benefits high wealth individuals. The availability of the 50% CGT discount in the trusts setting compounds wealth and tax inequity issues in Australia. Trusts already have a tax-advantaged status owing to the fundamental basis upon which they are taxed in Australia. In this article, we consider the policy measures that entrenched the current inequities in these two areas of the Australian tax system and the options for reform. Against a background of growing wealth inequality and housing unaffordability, we propose three major tax reforms: a complete abolition of the 50% CGT discount for individuals and trusts, a restrictions of the CGT main residence exemption, and entity taxation for trusts, combined with special measures to annihilate the tax attractions of discretionary trusts.
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