FCT v Greenhatch - CGT Streaming Appeal

The taxpayer’s High Court Special Leave Application in FCT v Greenhatch [2012] FCAFC 84; [2011] AATA 479 is to be heard on 10 May 2013.

Legislative references are to the Income Tax Assessment Act 1936 (ITAA 1936), the Income Tax Assessment Act 1997 (ITAA 1997) and the Taxation Laws Amendments (2011 Measures No. 5) Act 2011 (TLAM No 5 2011).

There is uncertainty whether a trust could differentially stream capital gains to beneficiaries before 1 July 2010 (amendments made by TLAM No 5 2011) (Improving the Taxation of Trust Income - Discussion Paper 4 March 2011 at [3.2]).

Broadly, in dispute is:

  • whether the assessable income of a beneficiary includes a ‘blended’ amount of all classes of income and capital gains of a trust’s taxable income (sec. 97 ITAA 1936; FCT v Bamford [2010] HCA 10); and
  • whether the part of the trust amount attributed to a trust gain is given a share/proportionate or causative amount construction (sec. 115-215(3)(b) ITAA 1997 ).

Appearing for the taxpayer are A. H. Slater QC and M. Y. Bearman instructed by Harwood Andrews Lawyers.