A beneficiary of two trusts whose assessable income wasnincreased from some $70,000 to some $13 million in light of hernentitlement to distributions from the trusts has been unsuccessful in claimingnon appeal that she had “disclaimed her interests” in the trusts. Instead, thenAAT found that she could not argue she had disclaimed her interests in thendistributions. This finding was on the basis that she did not bring up havingnmade “disclaimers” when she originally objected to amended assessments that thenCommissioner of Taxation issued in 2013. Additionally, in any event, the AATnfound that the disclaimers were legally ineffective because of the significantnperiod of time between the distributions being made (in 2006 and 2007) and thendisclaimers being made (in 2015).
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TIP:nAny attempt to disclaim an interest in a trust for tax purposes must be legallynvalid first – and the key consideration is that there must not have beennbehaviour that indicates implied acceptance of the interest. In this case, thentaxpayer’s behaviour was problematic because she did not act until well afternshe received the distributions and they were assessed as part of her income.
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