Be detrimental to the efficiency of insolvent administrations (as shareholder claims, especially relating to misleading conduct, were deemed more expensive and time consuming to assess).

Spark an increase in class action litigation.

Deter lenders from lending, and increase capital funding costs generally by creating return risk uncertainty.

Facilitate the provision of credit to companies and reduce the risk premiums charged.

Improve the efficacy of external administrations by reducing costs.

A new section 247E in the Corporations Act 2001 (Cth) will be enacted, confirming that a person is not prevented from obtaining damages or other compensation from a company simply because they are a shareholder. In other words, the reform does not abolish what have come to be called Sons of Gwalia style claims.

Instead the claims are subordinated. Section 563A will be repealed and a new provision inserted to the effect that the payment of a 'subordinate claim' is to be postponed until all other claims made against the company are satisfied. A 'subordinate claim' is defined as a claim for a debt owed by the company to a person in the person's capacity as a member of the company or any other claim that arises from a person buying, holding, selling or otherwise dealing in shares in the company.

The shareholders affected are entitled to receive copies of notices, reports or statements to creditors which they must ask for in writing. They can only vote at a creditors' meeting if they first obtain a court order (new section 600H).

The amendments are not retrospective. They will only apply where the shareholders' claim arises after the amendments come into effect. This means they will not apply to current administrations. The rights of shareholders to participate as creditors noted in the previous paragraph will apply to all future administrations. The claims will only be subordinated where the conduct giving rise to the shareholders' claim occurred before the amendments came into effect (section 4 of the Bill). This means that on the question of subordination, the previous law will continue to apply to all current administrations, and it will apply in future administrations where the shareholders' claim arises through actions that occurred before the amendments came into effect.

The "income of a trust estate", for purposes of allocating taxable income to beneficiaries, is determined by the trust deed and is not limited to 'ordinary income' for tax purposes.

Beneficiaries should be taxed on the taxable income of a trust in proportion to their percentage share of the distributable income of the trust.

A provision of a trust instrument, or a trustee acting in accordance with a trust instrument, may treat the whole or part of a receipt as income of a period and it will thereby constitute 'income of the trust estate' for the purposes of section 97.

If a trust instrument does not specify when a receipt is to be treated as income of a period, and the trustee does not have any special power to characterise receipts, then the question of whether the whole or part of a receipt constitutes 'income of the trust estate' for the purposes of section 97 will fall to be determined in accordance with the general presumptions of trust law.

Similarly, the provisions of a trust instrument, or a trustee acting in accordance with a trust instrument, may determine whether an outgoing is properly chargeable against the income of a period (absent which the question will fall to be determined in accordance with the general presumptions of trust law).

Subject to the possible operation of provisions outside Division 6, the amount included in a beneficiary's assessable income under section 97 consists of an undissected or unallocated proportionate share of the entirety of the [tax] net income.

Amounts distributed to beneficiaries by trustees always retain the same character in the hands of the beneficiaries for trust and tax law purposes as they had in the hands of the trustees for those purposes; and

Division 6 is an exclusive code for the taxation of beneficiaries.

Issues arising on audit of a trust or beneficiary with be dealt with by a specialist trust tax manager within the ATO.

No case should be resolved without a detailed consideration of the trust deed (including any amendments that have been made to it) and all relevant documents including (but not limited to) relevant trustee resolutions and financial statements.

When undertaking active compliance activities, the ATO will not, in the usual course, seek to rely upon a distribution statement contained in a trust's tax return as the sole basis for determining who should be assessed on the trust's [tax] net income.

Given the prior uncertainty on trust tax issues, the ATO will not actively scrutinise 2010 and earlier trust distributions, but will apply the decision in Bamford if tax issues do arise, for example:

A new Minerals Resource Rent Tax (MRRT) regime will apply to the mining of iron ore and coal in Australia - effectively at a rate of 22.5%.

The current Petroleum Resource Rent Tax (PRRT) regime will be extended to all Australian onshore and offshore oil and gas projects, including the North West Shelf (at a rate of 40%).