The trust is, at its core a simple concept, regularly complicated by tax and trust law changes. The High Court has recently handed down its decision in CPT Custodian and this may radically impact on the way tax practitioners deal with trusts. Then again it may not. This paper answers these questions (and others):
- when are beneficiaries of a trust 'absolutely entitled' to trust assets as against the trustee?
- what interest does a unitholder have in the trust assets... and does it matter?
- what is left of the reasoning in Charles Case following the CPT Custodian decision?
- can we still maintain that income and capital retain their character as they flow through a trust?
- what does the ATO think of all this?