ARTICLE · 18 OCTOBER 2023

Bendel v Commissioner of Taxation

Coleman Greig Lawyers

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Recent decision by AAT is at odds with the ATO's position.

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Did the Administrative Appeals Tribunal make the "correct and preferable decision" and where to from here?

In a recent case, the Administrative Appeals Tribunal (Tribunal) decided that a corporate beneficiary's unpaid present entitlement to income (or capital) of a trust was not a "loan" by the corporate beneficiary to the trustee under s 109D(3) of Division 7A of the Income Tax Assessment Act (ITAA). Therefore, it was not taxable as a deemed dividend (income).

The background toBendel v Commissioner of Taxation (28 September 2023)

Bendel consisted of trust entities which conducted an accounting and registered tax agent practice controlled by Mr Bendel and/or participated in commercial property syndicates. Mr Bendel operated the latter activities with his brother.

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