Employer Tax Implications

The Trustee has current class tax rulings from the Australian Taxation Office that confirms the following:

ACIRT is a trust estate which will be subject to Division 6 of the Income Tax Assessment Act 1936 (ITAA36).

Employer redundancy contributions to the Trust are allowable deductions under subsection 8-1 of the Income Tax Assessment Act 1997 (ITAA97). The Fund has been prescribed in regulation as an Approved Worker Entitlement Fund. This is important because any employer contributions to a fund that is not ‘approved’ will result in a taxable fringe benefit and thus taxed under the provisions of the Fringe Benefits Tax Assessment Act 1986 (FBTAA). Employer contributions to ACIRT are not subject to FBT.

The trustee has obtained a ruling from the New South Wales Office of State Revenue that confirms employer contributions to ACIRT do not attract Payroll Tax.