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Tax case: Trust loss scheme a “scam”

Published on 01 May 06 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

Raftland Pty Ltd v FC of T [2006] FCA 109.

The Federal Court has affirmed the Commissioner of Taxation’s (“Commissioner”) amended assessments totalling $4.205 million after finding that a taxpayer’s purported distributions of income to a unit trust with accumulated tax losses were a sham. The Court also held that the trust stripping provisions of s 100A of the Income Tax Assessment Act 1936 (“ITAA36”) applied. As a result, the income that was deemed not to have been distributed was assessable to the trustee under s 99A.

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Anna TANG

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