After a year-long review, the federal government-appointed Board of Taxation has rejected a controversial proposal to tax Australia's 450,000-odd trusts as companies.
Instead, the Board – headed by prominent company director Dick Warburton – will recommend that the existing laws governing trusts are better enforced by the Tax Office.
"I'm certainly not going to go in with a sledgehammer to crack a nut," he says.
"It really has proved more difficult to find exactly where abuses of trusts occur that don't impinge on regular usage. The more you look at it, trusts are legitimate ways to do business."
The backdown on the Coalition's pledge to crack down on the use of trusts follows yesterday's
announcement that the Tax Value Method (TVM) project had been abandoned.