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The AAT has held that an amended assessment issued to the taxpayer, a beneficiary of a trust, was validly issued within the time period specified in s 170 of ITAA 1936, namely, within a period of 4 years from the date of issue of the original assessment. The taxpayer's argument that the shorter amendment period of 2 years applied to him was rejected.

The taxpayer was nominated amongst the class of discretionary beneficiaries of a discretionary trust ("the Trust). In the year in question (2005), the taxpayer received no distributions from the Trust. The Commissioner issued an original assessment to the taxpayer for the 2005 tax year on 18 April 2006. On 12 April 2010, the Commissioner issued an amended assessment in respect of the taxpayer for the 2005 year in which the Commissioner included an additional amount of $2,144,843.

The Commissioner's power to amend under s 170 was limited to 2 years unless paragraph (d) of Item 1 in the table in s 170 applied. Paragraph (d) would apply if the taxpayer was an individual who "is a beneficiary of a trust estate at any time in the [2005 tax] year", in which case he could amend within 4 years.

The AAT held that the taxpayer was a "beneficiary" within the ordinary meaning of the word, citing the decision of Lindgren J in Kafataris v FCT [2008] FCA 1454; (2008) 172 FCR 242.

In that case, Lindgren J said: "A beneficiary is not simply a person who as a matter of fact obtained some practical benefit from the existence of a trust."

The taxpayer's other arguments as to why he was not a beneficiary were also rejected. The issue of the amended assessment was upheld: Yazbek and FCT [2012] AATA 477 (AAT, Deutsch DP, 25 July 2012).


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