30 March 2010: Many accountants will be relieved by the decision handed down by the High Court today in Commissioner of Taxation v Bamford.

Click here to download the guide for members to the practical application of Bamford

The High Court has confirmed that the tax result for trusts and their beneficiaries can be determined by the trust deed. In effect, the decision confirms how most practitioners have been treating the tax impact of trust distributions.

In summary, the High Court has confirmed the decisions of the Full Federal Court and has held the following:

The term 'that share' of the net income of the trust estate requires a proportionate approach to be used (i.e., divide the taxable income of the trust based on each beneficiary's percentage of the 'income' of the trust); and

The term 'income of the trust estate' refers to income according to trust law. That is, income as determined in accordance with the terms of the trust deed (which may be different to income under ordinary concepts).

More information
Commissioner of Taxation v Bamford [2010] HCA 10 (30 March 2010)

Resources
For the latest on Trusts post the Bamford decision - see 'Demystifying Trusts' training below (Melbourne only)

Knowledge Shop members recieve 10% off the price of trust deeds through Cleardocs. Click here to register now. Please note the discount is only available if you register through the Knowledge Shop website.