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Distributions of Income under a Moral Obligation
11.46. Distributions of income under a moral obligation fall into two classes. Firstly, there are cases in which, without the intervention of a Court, the impact of a strong moral obligation will induce a person to make some enduring provision for a relative by the creation of a trust of some part of his income-producing property or by some kindred means. It is impossible to catalogue all the types of instances where particular circumstances may raise the need for the implementation of a transaction of this nature. It will for the present suffice to be reminded of those cases in which grave and permanent incapacity calls for some special institutional care upon a stable income basis. In the Committee's view, the Commissioner should have a discretion to relieve transactions of this class from the provisions of the Act which otherwise would be attracted to them where he is of the opinion that to impose them would create unreasonable hardship. Secondly, there are the transfers of income-producing property to charitable institutions. Such transfers to selected charitable institutions should not be categorised as income-splitting.