Tax Avoidance in Family Trusts in Australia: An Article Review

RUNNING HEADER: Applied business research
Applied business research
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RUNNING HEADER: Applied business research
Article review on tax avoidance in Family Trusts in Australia
Summary and progression of the field
Tax avoidance involves the legal utilization of tax in one territory to a person's benefit aimed art
decreasing the total amount of tax payable by methods which are within law jurisdictions.
Various forms of tax evasion are considered to be morally illegal. Many corporations, firms, and
business that participate in the practice are negatively impacted by active customers. Tax evasion
involves efforts by corporations, trusts, business and other entities to evade tax through the use
of illegal means. A business may decide to avoid theoretical means of paying taxes by
establishing the subsidiaries in an offshore trust (Amato 2012, p.637) Family tax evasion can be
done by creating a separate legal entity from the property or business owner. Assets are often
transferred to a new business so the t the gains realized or income generated can be within the
legal entity and not the individual owner. Tax avoidance assets back from 1696. However, over
the years, this theoretical approach has improved with governments coming up with strategies
and policies in order to curb tax avoidance techniques.
In this review the following four articles were extensively used to discuss the field in detail;
1. Bird, Robert, and Karie Davis-Nozemack. "Tax avoidance as a sustainability problem."
Journal of Business Ethics (2016): 1-17
2. Dowding, K. and Lewis, C., 2012. Newspaper reporting and changing perceptions of
ministerial accountability in Australia. Australian Journal of Politics & History, 58(2),
pp.236-250.
3. Mafrolla, E. and D'Amico, E., 2016. Tax aggressiveness in family firms and the non-
linear entrenchment effect. Journal of family business strategy, 7(3), pp.178-184.
4. Xynas, L., 2010. Tax planning, avoidance, and evasion in Australia 1970-2010: the
regulatory responses and taxpayer compliance. Revenue Law Journal, 20(2010), p.38.
Article Themes/findings
Over the years, People save money into self-managed super funds as a popular strategy used to
minimize tax, avoid tax and plan estates. Some of such particular options are shut down and the
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RUNNING HEADER: Applied business research
Australian 2017 budget included various measures enacted to address some of the strategies and
challenges.
Fig 1.1 growth in trust
Various reason for setting up trusts include
Protection from divorce issues
High discretion in the case of trust capital and income being distributed to the available
beneficiaries. The latter involves the actual splitting between two trust beneficiaries. While
policies against avoidance are being applauded by the authorities in charge, it doesn't mean that
tax avoiders will find other channels of avoiding if not evading tax. The Australian Taxation
Office indicates a variety of arrangements that are aggressive towards the tax system
 Avoidance of tax and other obligations completely.
 Optimized rebates
 A rise in the income deductions per month
 Reduction of the family member's taxable income
Literally, there is little to do in commending discretionary trusts. The merits they bring are
minimal since many are limited by their existing destructive and damaging nature or features.
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