PART 4: Trust distributions are under ATO attack, are you ready?

This week in our section 100A series, we consider the third primary defence to section 100A, which is to show that the agreement was not a "reimbursement agreement" because it was entered into in the course of "ordinary family or commercial dealing".  Such an agreement is expressly carved-out from the operation of section 100A.¹

What is that meaning of "ordinary family or commercial dealing"? 

The meaning of "ordinary family or commercial dealing" for the purposes of section 100A is presently unclear.  The legislation does not define what an "ordinary family or commercial dealing" is, nor does case law provide a clear meaning of the term in the context of section 100A.  The genesis of the term came from a Privy Council decision in Newton v Federal Commissioner of Taxation  (1958) 98 CLR 1.  That case, however, was about section 260 of the Income Tax Assessment Act 1936  (Cth) - the predecessor to Part IVA - and not about section 100A.