21 Aug 13 Fund was not a "public trading trust" - B.E.R.T.
The AAT (Logan J and Hack SC DP) has held that a fund, being an "approved worker entitlement fund" for the purposes of the Fringe Benefits Tax Assessment Act 1986, was not a "public trading trust" as that expression is used in Division 6C of Part III of ITAA 1936. As a consequence, its income was taxed at 46.5% under s 99A ITAA 1936 and not at 30%, being the rate applicable to public trading trusts.
The question for decision was whether the fund was a unit trust. That is so because unit trust is an essential element of the definition of public trading trust. The AAT held that it was not because the beneficial interests in the fund were not divided into units, that is, discrete parcels of rights.
The AAT also said, at para 25:
"There is a further reason to conclude that the Fund was not a unit trust. That arises from the provisions of the Deed for the distribution of any surplus on dissolution. Clause 38.5 confers on the applicant a discretion which, if not exercised, or if not exercised effectively, results in the applicant holding the surplus "equally for the Participating Employers and Members". That notion seems to us to be entirely inconsistent with the nature of a unit trust which, we would have thought, would contemplate the distribution of any surplus in proportion to the number of units held."
The Commissioner's objection decision was affirmed.
B.E.R.T. Pty Ltd as Trustee for the B.E.R.T. Fund No 2 and FCT  AATA 584 (AAT; Logan J and Hack SC DP; 20 August 2013).