The High Court has granted the Tax Office an appeal in a dispute over the taxation of family trusts, placing a cloud over taxpayers’ ability to claim around $1 billion in refunds.

In April this year, the full bench of the Federal Court unanimously ruled in favour of Melbourne accountant Steven Bendel, who maintained that certain payments owed by a trust to a corporate beneficiary should not be treated as loans for the purposes of Division 7A of the Tax Act, contrary to the ATO’s long-held view.