Personal liability of a trustee to tax on trust income: part 1

A Matter of Trusts

Taxation in Australia Journal

The intersection of trust and tax law presents difficulties in establishing liability to tax on the income of a trust estate. Animportant question for a trustee of a trust is its exposure to personal liability to tax on the income of a trust estate. This two-part article is intended as a reminder of some trust and tax law issues and practical considerations in this complex question — in particular, the interrelationship of trust and tax law. In part 1, we discuss s 254 and its relationship with Div 6 of Pt III (Div 6) (both of the Income Tax Assessment Act 1936 (Cth) (ITAA36)) and the High Court decision of FCT v Australian Building Systems Pty Ltd (in liq)1 (Australian Building Systems).

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