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As previously reported in June this year, the Australian Taxation Office (ATO) published the Draft Taxation Determination TD 2017/D1 altering their previous published interpretation of the meaning of “distributes” for the purposes of the family trust distribution tax (FTDT).
The draft tax determination has now been published in its final form as TD 2017/20, confirming that FTDT can apply where there is a “distribution” to a person who is not a beneficiary of the trust.
On 23 October 2017, the Commissioner was granted special leave to appeal to the High Court against the Full Federal Court’s decision from earlier this year in Thomas v Commissioner of Taxation 2017 FCAFC 57.
The concept of “present entitlement” within the meaning of section 97 of the Income Tax Assessment Act 1936 and validity of a “disclaimer of entitlement of income” were considered by the Full Federal Court in the recent case of Lewski v Commissioner of Taxation  FCAFC 145 (Lewski) that illustrates the importance of having trust law and taxation law concepts properly aligned. Lewski was an appeal from a decision of the Administrative Affairs Tribunal.
The Australian Taxation Office (ATO) published the final version of the Practical Compliance Guidelines (PCG) 2016/16, which provides guidance in relation to what will be considered by the Commissioner when exercising his discretion to treat an interest in the income or capital of a trust as being a fixed entitlement and by extension whether a trust is a fixed trust for the purposes of the tax law.
Practical Compliance Guideline (PCG) 2017/13 confirms the ability for a sub-trust arrangement using the 7-year option 1 investment agreement to be converted into a compliant loan, as described under section 109-N of Income Tax Assessment Act 1936 (ITAA 36). The ability to refinance UPE for an additional 7 years may be advantageous to taxpayers that would otherwise have been required to repay such arrangements by either 30 June 2017 or 30 June 2018.
The Australian Taxation Office (ATO) has released for public comment draft Practical Compliance Guideline (PCG) 2017/D12, which gives guidance to the legal personal representative (LPR) of a deceased person as to circumstances where the LPR may be personally liable for the deceased’s tax liability.
In November 2016, "Are foreign trusts the new black?” written by Sladen Legal’s Phil Broderick was published in The Tax Institute Journal, Taxation in Australia.
In September 2016, an article written by Sladen Legal's Phil Broderick, Will Monotti and Ashleigh Eynaud was published in the Tax Institute’s Journal, Taxation in Australia.
This article addresses how trust deed variation clauses vary from trust to trust and gives examples of some of the problematic ones we’ve seen.
The Western Australia Court of Appeal, in the decision of Mercanti v Mercanti, has held that a variation of a discretionary trust deed to remove and appoint an appointor and guardian of the trust was valid.
In Behman v Behman  NSWCA 295, the Supreme Court of NSW confirmed the primary judge’s finding that the respondent was entitled to an equitable proprietary estoppel founded on the basis of the appellant’s representations of him having an interest in the family property.
On 6 September, 2016 Sladen Legal delivered an event titled Complex estate planning in a complex world.
In it the following issues were examined:
Foreign person duty and land tax surcharges; Of particular interest is the application of the foreign trust provisions to discretionary trusts.