Ordinary family dealings: how do we understand them?

Published Date: 15 Dec 2023


An important exclusion to a “reimbursement agreement” in s 100A of the Income Tax Assessment Act 1936 (Cth) are agreements “entered into in the course of ordinary family or commercial dealing”. The concept of “ordinary family dealing” is not defined in the legislation and is something that has had little judicial consideration. In addition, the concept is something that can be at odds with Australia’s tax system, which largely assesses taxpayers individually rather than as a family tax unit. However, when it comes to trusts, especially discretionary trusts, the prominence of “family” can be an important consideration as to why the trust is established, for example, protecting family wealth, as well as providing for family members. This article will provide a detailed understanding of what might be encompassed by an “ordinary family dealing” by considering the relevant case law, as well as research into the use of trusts and considered commentary.

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