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.