Hushed trusts hold trillions
New research has counted the cost of wealthy people funnelling money into trusts to avoid paying tax.
A report by RMIT University, commissioned by the Australian Taxation Office (ATO), has found that income from trusts topped $340 billion in 2013-14.
However, Australia has no register of trusts and many do not lodge tax returns.
Australia had nearly 850,000 trusts in 2016, comprising assets worth over $3 trillion.
The experts predict there could be over a million trusts by 2022.
RMIT’s Professor John Glover, one of the report’s authors, says Australia is lagging behind when it comes to the regulation of trusts.
“The largest part of the tax office's information about trusts comes through voluntary lodgement of trust tax returns and that's an inadequate way to proceed,” he told the ABC.
“A large part of the income lost is because the tax office doesn't know what is going on through current methods of information retrieval.
“We need to cure that by a registry of trusts of the kind they've introduced in Britain in 2017.”