Calls for clarity on Labor's trust tax

Sky News
1 Aug 2017

A prominent venture capitalist is calling for clarity, when it comes to Labor's proposed crackdown on trusts, saying it could impact innovation in Australia.

It comes as the Coalition takes aim at the policy saying it will hurt small business and hinder investment in the sector.

Businessman Mark Carnegie told Sky News Business the Opposition must make it clear how the changes will impact investors.

'If you're a small business man and you sell your business that capital gains tax is taxed at a concessionary rate,' he said.

'Is this what is called an alternative minimum tax in America going to move that up to 30 percent.'

Trust arrangements used by farmers, charities and deceased estates would be exempt.

But Labor intends targeting the unfair use of more than 300,000 trusts Australia's wealthiest earners and small business use to split income among family members to avoid paying a top tax rate of nearly 50 per cent.

'I think the only envy going on here is the government didn't think about the idea,' Mr Shorten told ABC radio on Monday.

Mr Carnegie said without clarity the crackdown creates uncertainty and could drive away investment.

'You've essentially said individuals are not part of the innovation nation, we are going to leave it to the superannuation funds,' he said.

'You've just said to people 'in a choice of working for a big company and a small company we are going to give you no incentive to go out and chance your arm.'

The opposition leader insisted Labor was not planning to prevent trusts being used legitimately to protect assets or for succession planning.