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ARTICLE · 25 MAY 2012

Trust resettlements: Tax Commissioner withdraws 'Statement of Principles'

Hall & Wilcox
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Discusses the impact of the withdrawal of the 'Creation of a new trust – Statement of Principles August 2001'.

AustraliaFinance and Banking
Andrew O'Bryan
Andrew O'Bryan
Keith James
Keith James
Emma Woolley
Emma Woolley

On 6 September 2011, the High Court refused the Commissioner's application for special leave to appeal the decision of the Full Federal Court in FCT v Clark and Anor [2011] FCAFC 5 (Clark). As a result, the Commissioner withdrew its 'Creation of a new trust – Statement of Principles August 2001' (Statement of Principles) on 20 April 2012.

Where to from here? Substratum of the trust

Importantly, the withdrawal of the Statement of Principles is not the end of the resettlement issue. The underlying resettlement principle must be considered with any variation.

Irrespective of the Commissioner's view in the Statement of Principles, resettlement cases have focussed on the concept of a trust having a substratum. In Re Ball's Settlement [1968] 1 WLR 899, Megarry VC noted:

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