Trusts at the intersection of tax and criminal laws: unpaid tax, “unexplained wealth orders” and the Proceeds of Crime Act 2002

Trust property which persons effectively control can be forfeited to the Commonwealth as “unexplained wealth” unless a court is satisfied that the wealth was not acquired through contravention of a Commonwealth law. No offence need be proven, and no tax assessment need be raised. The article examines conceptual and legal problems which arise when “unexplained wealth” procedures are used to recover unpaid tax. A person’s current “wealth” is improbably defined to include property formerly owned and disposed of at any time. Tests to establish the “effective control of a discretionary trust” reflect the jurisprudence of civilian jurisdictions where trusts are not recognised.