MacCormick v Federal Commissioner of Taxation [1945] HCA 10

71 C.L.R.J OF AUSTRALIA. 283

[HIGH COURT OF AUSTRALIA.]

MacCORMICK x : A . 4 : . APPELLANT ; AND

THE FEDERAL COMMISSIONER OF TAXATION RusponpEnt.

Gift Duty—Exemption—Gift " for or towards the maintenance, education or appren- 14, C, op A. ticeship of any person" —Marriage settlement—Trust fund—Gift of part of fund 945, to intended wife—Gift over to children of marriage—Power of appointment by 7 wife—Gift of balance of fund to intended wife's adopted infant daughter for her SyDNEY, " maintenance, support and personal benefit" —Discretionary power of trustees— May 7, 8; ioner—Appeal June 27.

—" Satisfaction" of Commissioner—Rule applied by Commis therefrom —Gift Duly Assessment Act 1941-1942 (No. 52 of 1941—No. 17 of 1942), s. 14 (i) (ii),

Section 14 (4) (ii) of the Gift Duty Assessment Act 1941-1942 provides :— "Notwithstanding anything contained in this Act, gift duty shall not be

payable in respect of . . . (ji) any gift concerning which the Commis- sioner is satisfied . . . (ii) that the gift is made for or towards the maintenance, education or apprenticeship of any person, and is not excessive in amount, having regard to the legal and moral obligations of the donor to afford the maintenance, education or apprenticeship."

A settlor executed a marriage settlement whereby he settled a considerable fund upon trust for himself until solemnization of his intended marriage and thereafter upon trust: (a) Asto two-thirds of the fund that the trustees should pay the net income derived therefrom to his intended wife during her life for her separate use and without power of anticipation and after her death hold the capital and income of the two-thirds upon trust for children of the marriage with gifts over in certain events. (b) As to the remaining one-third of the fund upon trust for an adopted daughter of his intended wife so that the same should not vest in the daughter absolutely until she attained the age of thir