A recent Full Federal Court decision reflects the diversity of issues which can arise in the complex world of discretionary trusts.
Recent comments by the Full Federal Court in Carter v FCT 1 remind us of the following:
corporate trustees should ensure that trust resolutions are made in accordance with trust law, the trust deed, the trustee company’s constitution, and the Corporations Act 2001 (Cth);
default beneficiaries of discretionary trusts seeking to disclaim an entitlement to the income or capital of the trust should be proactive and adopt precise and clear language; and
the tension between trust law and tax law continues to enliven difficult issues of statutory interpretation and policy.
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