Self-initiated Review of the Tax Treatment of Bare Trusts and Similar Arrangements


The Board has conducted a self-initiated review into the tax arrangements applying to bare trusts and similar arrangements. Bare trusts and similar arrangements are used widely in society by individuals, domestic and multinational businesses, and charities with almost $4.5 trillion in assets held via these arrangements by licensed custodians alone.

The Board considered whether, and how, to legislate in respect of the current widespread practice of disregarding or looking through these trusts for income tax purposes. The practice appears not to be supported by Division 6 of Part III of the Income Tax Assessment Act 1936 for most types of bare trusts, and is only maintained by an ongoing administrative approach from the Commissioner of Taxation that may change should developments in law, such as a court decision, make it no longer tenable.

Working Group

The Board established a Working Group of John Emerson AM (Chair), Dr Mark Pizzacalla and Karen Payne to conduct the review. The Working Group was assisted by officials from the Department of the Treasury and the Australian Taxation Office. The Board would like to express its appreciation for the assistance provided by these officials.

Board Report

The Board completed its review of the Tax Treatment of Bare Trusts and Similar Arrangements in June 2017.

Further information

For further information about the Board’s work on if particular areas of trust taxation could benefit from reform report, please contact the Board of Taxation Secretariat at or 02 6263 4366.