Broad overview of the trust loss measures

What are the consequences if the test is failed?

Where the income injection test is failed, no deduction is allowable in the income year being examined against the scheme's assessable income, with the result that the net income of the trust for the income year is increased to equal the full amount of the scheme's assessable income. In addition, to the extent the deduction of the trust may be appropriately related to the derivation of the scheme assessable income, the deduction is not allowable.

However, for all other purposes, any deduction not related to the derivation of the scheme's assessable income is still allowable to the trust. For example, it can be deducted against other assessable income derived in the income year being examined or can be deducted in a later year of income in the form of a tax loss.

Sections within Income injection schemes

• When does the income injection test apply?
• Terms used in the income injection test
• What are the elements of the income injection test?
• What are the consequences if the test is failed?
• Examples of how the income injection test may apply