Shams, reimbursement agreements. . . and the return of economic equivalence?

The Raftland Trust 'washed' $4 million of trust distributions through a loss trust whilst the benefit of nearly all sums distributed was retained. 'Sham' characterisation was confirmed by the High Court for this otherwise legally enforceable transaction. The taxpayer's financial and fiscal objectives had impermissibly differed. This article examines the reasoning of members of the court and outlines some disturbing implications.