• Attribution of non-resident trust income where the FIF measures do not apply

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    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    From 1992-93, the share of the income of an Australian beneficiary of a non-resident trust who is not assessed under the FIF measures is worked out by one of two methods. [SECTIONS 96B and 96C]

    Method 1

    This method is used where all the income, profits or gains derived by the non-resident trust estate during the income year consisted of either or both:

    • income, profits or gains to which beneficiaries of the non-resident trust estate were presently entitled
    • income, profits or gains to which beneficiaries of the non-resident trust estate were not presently entitled but which were distributed to the beneficiaries within 2 months after the end of the income year.

    In the above cases, the beneficiaries are deemed to be presently entitled to a share of the net income of the non-resident trust estate equal to the percentage of the total income, profits or gains of the non-resident trust represented by the total of the amounts:

    • to which the beneficiaries were presently entitled, or
    • to which the beneficiaries were not presently entitled but which were distributed to the beneficiaries of the trust estate within 2 months after the end of the income year. [SUBSECTION 96C(1)]

    Method 2

    In any other case, the beneficiaries are deemed to be presently entitled to a share of the net income of the non-resident trust equal to whichever is the greater percentage of:

    • the income of the non-resident trust estate represented by the share of income to which the beneficiaries were entitled or were entitled to acquire, or
    • the capital of the non-resident trust estate represented by the share of the capital to which the beneficiaries were entitled or were entitled to acquire. [SUBSECTION 96C(2)]

    Where the aggregate of the Australian beneficiaries' present entitlement is more than 100 per cent of the income of the non-resident trust estate, the total interests are reduced to 100 percent and each beneficiary's interests are reduced proportionally. [SUBSECTION 96C(6)]

    Last modified: 08 Jun 2005QC 27386