Federal Commissioner of Taxation v Carter [2022] HCA 10- A Game Changer for Taxation of Trust Distributions in Australia?

In Federal Commissioner of Taxation v Carter, the High Court of Australia asked to clarify the meaning of ‘is presently entitled’ under section 97(1) of the Income Tax Assessment Act. This case is a significant example of the High Court dealing in recent years with the issue of whether the present entitlement of a beneficiary under section 97(1) of the Income Tax Assessment Act must be determined immediately prior to the end of the income year. The article attempts to provide a high-level overview of this case and how this case can impact taxation of trust distributions.