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The meaning of “income of the trust estate”in Div 6


In March 2012, the Commissioner of Taxation released a draft taxation ruling, TR 2012/D1, which is about the meaning of the expression “income of the trust estate” in Div 6 of Pt III of the Income Tax Assessment Act 1936 and related provisions. This article examines the issues that arise from the draft ruling. The article first discusses the background in statute and case law, then moves to the content of the draft ruling for a detailed examination of the principles supporting or otherwise the conclusions reached by the ATO. Based on that analysis, the author concludes that the draft ruling should be withdrawn in its entirety, and redrafted and reissued (if at all) to accord with judicial authority, take into account the ongoing broader review of trust taxation, and should apply prospectively from the operative date of any changes to statute law and/or practice resulting from that broader review.

Author profile

Paul Dowd CTA
Paul is the Head of Tax in Australia for RBC Dexia Investor Services Trust, a leading global custodian and investment administration organisation. Prior to that, he spent many years in public practice with an emphasis on trusts and high net worth individuals. Paul is a former NSW State Chair, a current member of State Council and has presented numerous papers for the Taxation Institute of Australia. - Current at 01 June 2010
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