Note: This paper was also presented at the Darwin Seminar on 28 November 2008.
This paper covers issues such as:
- the concepts of "net income", "income of the trust estate" and "distributable net income"
- the meaning of Gleeson CJ's obiter in the ANZ Savings Bank case and whether the Cajkusic interpretation is correct
- the various kinds of income clauses in trust deeds - (a) accounting income, (b) section 95 income and (c) income as determined by the trustee - and the effect of those formulations on tax liability
- detailed examples of trust distributions involving capital gains, franked dividends, exempt income, rental income, disallowed deductions, and other mismatches between trust income and section 95 income.