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Trust disclaimers: FCT v Carter
Published on 01 May 22 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
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.
Author profile
Dr Philip Bender ATI
Dr Philip Bender, ATI is a barrister at the Victorian Bar. He is the author of Bender’s Australian Stamp Duties, published by the Tax Institute. He acts in Federal and State taxation, superannuation, and trusts and estates matters for taxpayers and revenue authorities. In the trusts area, he has acted in many taxation disputes involving trusts issues, and has acted in many trusts matters involving, amongst other topics, trust deed and will interpretation, alleged breaches of trust; trustee removal applications; judicial advice; charitable trusts; and superannuation death benefits disputes. - Current at 06 March 2023
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