In its interpretative Decision ATO ID 2008/2, issued on 11 January 2008, the Australian Taxation Office (ATO) expresses a view that a Dutch pension fund constituted as Stichting is a trust for the purposes of Australian tax law.
The Interpretative Decision deals with an issue of the availability of a discount under the capital gains tax rules, which is available to individuals, complying superannuation funds, life insurance companies and trusts. To determine whether the discount is available, the ATO considers the by-laws of the Stichting to determine whether the essential elements which give rise to a trust relationship are present, namely that:
|-||there is a trustee holding a legal or equitable interest in the trust property;|
|-||there is trust property which is a property capable of being held on trust and which includes a chose in action;|
|-||there is one (or more) beneficiaries other than the trustee; and|
|-||there is a personal obligation on the trustee to deal with the trust property for the benefit of the beneficiaries.|
The ATO concludes that these elements are present in this case and therefore the Stichting is a trust for the Australian tax purposes. As such, it may be entitled to the discount.
Note. It would be fascinating to consider whether a similar exercise could be done in relation to other Civil Law entities, for example Liechtenstein Anstalts, and what the Australian tax implications of such exercise would be.