This Draft TR, issued today [Wed 28.3.2012], provides the Commissioner’s preliminary views of the meaning of “income of the trust estate” in Div 6 of Pt III of the ITAA 1936 and related provisions.

The ATO said there is no set or static meaning of the expression “income of the trust estate” as used in Div 6. The meaning in the case of a particular trust will depend principally on the terms of that trust and the general law of trusts. The ATO added that the statutory context in which the expression is used may also influence its meaning. It said the context of Div 6 the “income” must be:

  • measured in respect of distinct years of income;
  • a product “of the trust estate”; and
  • an amount in respect of which a beneficiary can be made presently entitled.

COMMENTS are due by 11 May 2012. ATO contact: Lyn Freshwater – Tel: (07) 3213 5554; Fax: (07) 3213 5971; Email: lyn.freshwater@ato.gov.au.

[FJM Note:    I understand this draft ruling was very controversial and is to be withdrawn.]

[LTN 60, 28/3]