Education Trusts - Recent ATO Rulings

People who establish education trusts for the benefit of their family members have been warned by the ATO that payments to students from the trusts may be subject to tax.

Acting Tax Commissioner Michael D'Ascenzo said some people are setting up education or scholarship trusts for family members, and attempting to take advantage of laws that allow scholarship and bursary winners to receive their awards tax free. The Tax Office has published its view in Taxation Ruling TR 93/39. "The ruling confirms that these types of payments are only tax exempt if they are received by a student who has won an award or been selected through an open process", Mr D'Ascenzo said.

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