Tuesday, March 23, 2021

When amended assessments and trust disclaimers don’t mix**

Last week’s post explored the Yazbek decision. 

One of the critical aspects of the core principle from that decision is the potentially significant adverse consequences that can arise in relation to the Tax Office issuing amended assessments to a taxpayer. 

In particular, any person that is merely a potential beneficiary of a discretionary trust can automatically be subject to a four-year amendment period. 

This is despite the case that they may not even have been aware that they were a potential beneficiary of, for example, a distant relative’s trust. 

This said, where a potential beneficiary is unaware of their beneficiary status, if an amended assessment is issued more than two years (which is the general time limit), but less than four years, the relevant beneficiary may be able to challenge the assessment if they immediately disclaim their interest in the relevant trust. 

A previous post has considered the manner in which an effective disclaimer can be made. 

Next week’s post will further explore some of the key issues in relation to trust disclaimers. 

As usual, please contact me if you would like access to any of the content mentioned in this post. 

** for the trainspotters, the title today is riffed from the ACDC song ‘Dogs of war’. Listen hear (sic):