Law Equity and Trusts for Income Tax Assessment - myassignmenthelp

Question: Discuss about theLaw Equity and Trusts for Income Tax Assessment. Answer: Establishment of equitable interest For the purpose of advising Laquan regarding equitable interests and the remedies which may be taken into consideration on his part, it is needed to determine if the interest is that of an equity interest. In order to determine this, equity test is needed to be performed that has been set out in Subdivision 974-C of the Income Tax Assessment Act 1997. It is with the help of equity test with the help of which financial arrangement issued on the part of a company which rather than having returns which may be deductible, may have frankable distributions[1]. A scheme leads to an equity interest when the scheme satisfies in addressing the aspects of equity test. When it comes to existence it is also subject to satisfying debt test. Until an interest may satisfy the debt test when issuing it, on the part of the entities equity interest may be issued when they issue: An interest that focuses on providing with return which is subjected to the economic performance of the issuer [item 2] Membership interest like share [item 1] An interest wherein providing return is subjected to the issuers discretion [item 3] Or An interest which may or will convert into such a share or interest. [item 4] Thus considering the presence of item 1 and 2 in case of Aruche Web Masters i.e. the issue of membership interest and issue of an interest providing returns which was subjected to the economic performance entitles Laquan to equitable interest. Remedies Considering the above made discussion it may be stated that equity in regards to law has two meanings that includes natural or fairness of justice and other term which refers to set of rules formulated on the part of courts of equity which makes the procedures and rules of common laws flexible[2]. Thus, in case of Laquan, equitable interest occurs from the relationship between Laquan and Aarushi that is enforced by equity and not by common law. Equitable interest incorporates the beneficiarys interest in a fixed trust in which the trustee, within a fixed trust wherein trustee has a legal interest, the partners interest in a property, the partnership along with the interest which under a will intestacy is expected on the part of beneficiary for the purpose of receiving the deceaseds property. Referring to the case of Laquan it may be observed that the partners had borrowed the needed capitals for the establishment of the business in partnership which makes it essential to pay the borr owed amounts in partnership which may be seen to be performed in this case[3]. However, it is noticeable in this case that, Laquan and Aarushi shared a relationship of mutual trust and confidence that was not backed by any formal partnership agreement. It is due to this fact, that the Laquan and Aarushi shared a relationship of mutual trust and confidence that was not backed by any formal partnership agreement which resulted in establishment of Aaruche Web Masters results in establishment of partnership onus on the part of the involved parties which is applicable on Aarushi and Laquan as well. It is this partnership onus, which results on the part of the involved parties owning fiduciary duty. Fiduciary duty implies the duty of loyalty wherein profit or compromise is present. In case of Laquan, it may be noticed that on falling out of the business, Aarushi had updated the business website wherein she took off the references of Laquan[4]. This is a clear reflection of the fact that t he actions taken on the part of the Aarushi were against the interest of her partner which lead to breach of fiduciary duty. In this case it may be stated that the conflict between the duty of Aarushi as a partner and individual interest lead to breach of the duty. In addition to that, other onus asserting duty can also be seen to be associated with Aarushi. To get in depth of the matter, in case of commercial relationships on the part of the involved part may usually have fiduciary duties which are dependent on individual situation[5]. Herein, on the part of Laquan it is needed to establish that there existed a relationship of mutual confidence and trust between Laquan and Aarushi and that they were not involved in a sophisticated business relationship, were not advised by lawyers and no formal agreement. Thus, on the basis of the above made discussion it may be observed that certain duties on the part of Aarushi have been breached in this case. In against this, breach, Laquan may seek remedy under equitable compensation which focuses on restoration and restitution due to breach of fiduciary duty that was material to losses associated with profits. Essentially, the act of Aarushi i.e. acting against the interest of her partner Laquan by updating the business website and taking off references to Laquan establishes infringement of equitable interest and ongoing infringement as the business was a joint venture of Aarushi and Laquan. In this context Laquan may seek remedy for the infringement of equitable interest under equitable mandatory injunction which would result in compelling Aarushi to pay to Laquan[6]. In this context the aspects which are needed to be taken into consideration are infringement of equitable interest, due to the absence of any apparent contract between them specific performance probably was not available. For the purpose of available equitable remedies Laquan may seek remedy under resulting trusts. Resulting trust will be taken into consideration when in regards to joint ownership, disproportionate amount has been provided in context to purchase price to the partners registered interest or when purchase monies have been provided by an individual who is not vested in legal title. In this case it may be observed that Aaruche Web Masters was a case of joint ownership wherein it was the individual decision of Aaruchi to part her ways followed by which she updated the business website, taking all the references of Laquan. It was due to this joint ownership that resulted in making both the parties severally and jointly liable and make all the repayments[7]. This makes Aaruche equally liable to make all the repayments as Laquan. Other than that, in case of Aaruchi and Laquan it may be noticed that the establishment of Aaruche Web Masters occurred jointly at the garage of Aaruchis parents hom e. As they jointly took the occupancy at the garage, it is under equitable presumptions which make them hold the legal estate in common in shares in equal proportions as they had equal contributions in it. In this regard Calverley v Green [1984] 155 CLR 242 is mentionable, wherein, on the part of court it was held that in case in which two or more individuals contributes in the purchase process of a property, that is conveyed to the involved parties in their joint names, in such cases the equitable presumptions is that the involved parties who contributed to the ownership holds the legal estate for themselves in common as tenants in shares proportionate in regards to their individual contributions apart from cases wherein the contributions are equal in nature[8]. In regards to the case of Laquan, he may also seek remedy due to the presence of aspects associated with undue influence, unconscionable conduct and unjust enrichment. Aspect of unconscionable conduct may be seen from the fact that followed by failure of joint venture of Aaruchi and Laquan the payment needed to be made to Laquan was not recognized on the part of Aaruchi. In this regard the case of Muschinski v Dodds [1985] HCA 78; 160 CLR 583; 60 ALJIIR 52; 62 ALR 429; 11 Fam LR 930 is mentionable here. In this case it was held that a trust is needed to be imposed due to the fact that it is considered to be unconscionable followed by the failure of a joint venture for Dodds asserting his legal entitlements wherein the payments of Muschinski were not recognized[9]. This is also applicable in case of Aaruchi. Other than that, the fact that followed by failure of their business, Aaruchi has updated business websites and took off all his references also reflects unjust enrichment, and ch anging of the garages lock establishes undue influence. Thus, it makes it essential for the imposition of a trust. Bibliography Calverley V Green [1984] HCA 81; (1984) 155 CLR 242; 59 ALJR 111; 56 ALR 483 (6 December 1984) (2007) Trusts https://www.trusts.it/admincp/UploadedPDF/200903021746220.jAustralia_Calverley%20v%20Green19841206.pdf Debt And Equity Tests: Guide To The Debt And Equity Tests (2018) Ato https://www.ato.gov.au/Business/Debt-and-equity-tests/In-detail/Guides/Debt-and-equity-tests--guide-to-the-debt-and-equity-tests/?page=6 Equitable Claims Against Interests In Property (2008) tved https://www.tved.net.au/index.cfm?SimpleDisplay=PaperDisplay.cfmPaperDisplay=https://www.tved.net.au/PublicPapers/November_2008,_Lawyers_Education_Channel,_Equitable_Claims_Against_Interests_in_Property.html Kaiser, Lars, "Public Trust And Equity Returns" [2015] SSRN Electronic Journal LA302 - Muschinski V Dodds (2007) Vanuatu https://www.vanuatu.usp.ac.fj/courses/la302_equity_trusts_and_succession_1/LA302_Cases/Muschinski_v_Dodds.html Latimer, Paul, Australian Business Law 2006 (CCH Australia, 2007) Sarra, Janis Pearl, Creditor Rights And The Public Interest (University of Toronto Press, 2007) Vickery, Roger and MaryAnne Flood, Australian Business Law (Pearson Australia, 2012) Wilkie, Margaret, Rosalind Malcolm and Peter Luxton, Equity Trusts (OUP Oxford, 2012)