Income injection schemes – consequences

Under these schemes, income is injected into trusts with tax losses or other deductions to reduce the trust's net income under subsection 95(1) of the ITAA 1936, reducing the amount that is included in the assessable income of the trust's beneficiaries.

However, a trust that is involved in such a scheme to take advantage of tax losses or other deductions may be prevented from making full use of them under the income injection test in Division 270 of Schedule 2F to the ITAA 1936.

    Last modified: 22 Apr 2016QC 18663