Why key thresholds in trust taxation are better set by Parliament than left to administrative guidance — and what a recent High Court decision shows about the risk of relying on the latter.
The ATO regularly issues administrative guidance — determinations, rulings, practical compliance guidelines — to explain how it will apply the law in practice. That guidance is genuinely useful for taxpayers day-to-day. But it isn't the law itself, and where guidance drifts from what the underlying statute actually supports, taxpayers who relied on it can be left exposed.
Commissioner of Taxation v Bendel [2026] HCA 18 — The High Court held that an unpaid present entitlement owed to a corporate beneficiary is not a "loan" for Division 7A purposes, meaning the ATO's prior administrative position (TD 2022/11) had extended beyond what the statute supported. The lesson: where a threshold genuinely matters to taxpayers' planning, it belongs in the statute, not in guidance that can be reinterpreted.