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The "income" of a trust - Draft TR 2012/D1 - controversy and contention.

Publication date: 04 May 12 | Source: WEEKLY TAX BULLETIN

Issue: Issue 17, 27 April 2012


On 28 March 2012, the ATO issued Draft Taxation Ruling TR 2012/D1 dealing with the meaning of the word "income" in connection with trusts. There is much in the Draft Ruling which is controversial and not supported by legislative or judicial authority. It is likely, therefore, that it will elicit submissions ranging from calls for outright rejection to less ambitious calls to qualify just its more contentious implications.

While the Draft is most obviously directed to trusts in the SME market, it has implications for larger property trusts and managed funds. The Draft contains no carve out for trusts used in funds management or the property industry. Indeed, it contains no acknowledgement at all of the current comprehensive trust review or the Treasury project on the "attribution regime" for managed investment trusts.

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Author profile

Prof Graeme Cooper FTI
Graeme is Professor of Taxation Law at The University of Sydney and a consultant to Greenwoods & Herbert Smith Freehills. He is a former Chair of the New South Wales State Council of The Tax Institute and former member of the National Council. He has worked as a consultant to the ATO, Treasury, Board of Taxation, United Nations, OECD, World Bank, the International Monetary Fund and several foreign governments. He was admitted to legal practice in New South Wales and Victoria, and practised commercial law and tax in Sydney before entering teaching. He has taught in law schools in Australia, Europe and the United States, and holds degrees from the University of Sydney, University of Illinois and Columbia University, New York. - Current at 26 June 2019
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