The appeal concerned the interaction of div 855 and sub-div 115-C Income Tax Assessment Act 1997 (Cth) in relation to a capital gains event arising from the disposal of alleged non-taxable Australian property by trustees. The Commissioner of Taxation had made an assessment that s 855-10(1) of the 1997 Act did not apply so as to disregard the capital gain in calculating the amount assessable to the trustee in relation to the beneficiary. The Appellant submitted that s 855-10(1) did not trigger the rules contained in div 115-C because they apply only in respect of the share of a foreign beneficiary of an estate’s ‘Australian’ gains.
Upon consideration of the statutory scheme and amendments that had been made in 2011, the court held that the initial trial judges were correct, and that s 855-10(1) did not apply to the trustee because it is a resident trust.
Mark Robertson QC (with G Antipas and G Edwards) appeared for the Appellant, instructed by Ernst & Young.
The judgement is published here.