The High Court delivered judgment in Commissioner of Taxation v Bendel [2026] HCA 18 on Wednesday, 10 June 2026. This is the second session in our series. Last week was an introduction; this week we read the reasons closely.
The profession has greeted Bendel as a taxpayer victory on the s 109D(3) loan question. That is not our concern. Our concern is what the Court said, in the course of deciding it, about present entitlement itself.
Come prepared on four questions.
- What does “setting aside” income actually achieve, set against the s 97 requirement of a present legal right to demand and receive payment?
- Is a set-aside resolution a “payment” or an “application” of income, and what follows for s 101 if it is neither?
- How did the Court treat the nature of income, its allocation and distribution, and what rights does a resolution bring into existence?
- Is there a common law action for money had and received, and so a debt at law, once present entitlement is communicated?
The practical edge: the “set aside” clauses that saved the taxpayer in Bendel are the clauses that expose the trustee to the next argument. If present entitlement fails on standard wording, the consequence is not a deemed dividend; it is assessment of the trustee under s 99A at 47 per cent.
Adrian Cartland will lead the discussion.
Required Reading: Commissioner of Taxation v Bendel [2026] HCA 18
Recommended Reading to understand the nature of present entitlement:
The Incoherence of Accounting For Trust Distributions by Dr. Campbell Rankine
Towards a Better Accounting for Present Entitlement By Adrian Cartland