The Commmissioner of Taxation has issued a Taxpayer alert TA 2011/2 advising that he is considering arrangements where a contractor uses a discretionary trust to supply services to a labour hire firm which in turn might supply services to a recruitment agency. The Commissioner is concerned if the trust is used by the contractor to split income with beneficiaries and is looking at the arrangements in the context of the personal services income regime. Clients are reminded that using entitities to split income in circumstances where one person is really providing personal services is always risky unless a determination is in place from the Commissioner. There are a series of relevant taxation rulings on this topic. If you need assistance please contact me