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ARTICLE · 27 JULY 2017

High Court clarifies what is a unit trust

Carroll & O'Dea
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This recent High Court decision provides useful guidance as to what constitutes a unit trust under the ITAA 1936 (Cth).

AustraliaCorporate/Commercial Law
Selwyn Black
Selwyn Black
Nicholas Huang
Nicholas Huang
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The recent High Court decision in ElecNet (Aust) Pty Ltd v Commissioner of Taxation [2016] HCA 51 provides useful guidance as to what constitutes a unit trust under the Income Tax Assessment Act 1936 (Cth) (ITAA).

The Key Facts

  1. ElecNet (Aust) Pty Ltd (ElecNet) was the trustee of the Electrical Industry Severance Scheme (EISS).
  2. The EISS was created in 1997 by deed (Trust Deed).
  3. Employers in the electrical industry can join the EISS. Employers can make payments to ElecNet with respect to an employee. That payment is credited by ElecNet to the name of the employee. If that employee's employment is terminated, ElecNet makes a severance or redundancy payment to the employee.

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