The Commissioner assessed the trustee of a non-fixed trust in three income years under s 98 of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936). The trust had made capital gains in each year through its disposal of shares which were not “taxable Australian property” as defined in s 855-15 of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997). In each year, the trust resolved to distribute 100% of the capital gains from the sale of those shares to Mr Alexander Greensill, a foreign resident. In the last of the years, the trust also transferred certain shares to Mr Greensill in specie.
After a review of the tax affairs of the trust, the respondent issued assessments to the trustee under s 98 on the basis that the capital gains distributed to Mr Greensill, being deemed or attributable capital gains of Mr Greensill under Subdiv 115-C of the ITAA 1997, were assessable to the trustee and not disregarded under Div 855 of the ITAA 1997. The trustee objected to these assessments and that objection was disallowed. This proceeding was an appeal under s 14ZZ of the Taxation Administration Act 1953 (Cth) against the respondent’s objection decision.
Mark Robertson QC (with Greg Antipas) appeared for the Applicant, instructed by Ernst & Young.
The judgement is available here.