Source: Taxation In Australia Journal Article
Published Date: 1 May 2022
Disclaimers of rights under a trust by a beneficiary have previously been seen as a possible mechanism for retrospectively avoiding a present entitlement and an income tax liability in respect of trust income under the provisions for trust taxation. The High Court has now swept away that possibility in its recent decision in FCT v Carter. Now, any disclaimer made after the end of the income year will not be effective to remove a beneficiary's present entitlement and tax liability in respect of trust income under s 97 of the Income Tax Assessment Act 1936. This article explores the High Court's reasoning and the reasoning of the decision-makers in the Administrative Appeals Tribunal and the Full Federal Court.
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