In brief
Last month we discussed the High Court decision in the
Bamford case. We highlighted that the ATO was expected to
issue a Decision Impact Statement in the near future. The ATO has
now done so with its statement dated 2 June 2010.
Summary of the Bamford case
To recap, this was the first time that the High Court had been
approached to consider two important concepts in trust law - the
meaning of "share" in the Bamfords' appeal and the
definition of "net income" in the Australian Taxation
Office's appeal. The case involved consideration of key aspects
of Section 97 of the Income Tax Assessment Act 1936
(ITAA36).
The High Court rejected the arguments used by the Commissioner
and held that the terms of the trust deed should prevail in
determining how the beneficiaries should be assessed to tax. The
Commissioner did have a victory in that the High Court found
against the Bamfords on the argument put forward that they should
only be assessed on the quantum
