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TD 2018/D3: ATO swings for trust splitting; hits much further


The arrival of TD 2018/D3 on trust splitting disrupts the pleasant calm around trust variations since TD 2012/21, when the ATO seemed to throw its hands in the air post-Clark and say that almost anything done in accordance with powers under a trust deed is not a resettlement. The draft ruling introduces a different approach to trusts, the “new trust view”, which has historically been a minority view supported by such thinkers as Dr Campbell Rankine and Mark Robertson, QC.

By adopting the “new trust view” in regard to trust splitting, the ATO will (correctly) put CGT event E1 as a live issue on each change in trustee of a trust. What constitutes a resettlement will need to fi nally move away from the “substratum of the trust” tests in line with more recent authority.


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Adrian Cartland
Photo of author, Adrian CARTLAND Adrian is a taxation and commercial lawyer and Principal of Cartland Law. He specialises in devising novel solutions to complex trust, equity, partnership and contract law issues and transactions. He is experienced in all the State taxes, particularly stamp duty and land tax, and advises across the full range of Federal taxes. Adrian is also the Creator of Ailira, the Artificially Intelligent Legal Information Research Assistant, which automates legal research and advice in the areas of tax law, business structuring, estate planning and domestic violence. Adrian is known for his innovative advice and ideas and also for his entertaining and insightful professional speeches. - Current at 12 January 2019
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