This section explains the tax treatment under section 99B of distributions made by a non-resident trust estate - whether or not the distribution was made out of income or gains which have previously been attributed to an attributable taxpayer.
Is the distribution assessable?
Under section 99B, distributions made by a non-resident trust estate to Australian resident beneficiaries are assessable in the hands of the beneficiaries, except in the following five cases:
- the distribution is capital of the trust estate - an amount derived by the trust estate which would have been subject to tax if it had been derived by a resident taxpayer will not be taken to represent capital
- the distribution is an amount that has been taxed or is liable to tax in the hands of the beneficiary under section 97 or in the hands of the trustee under sections 98, 99 or 99A
- the distribution paid to or applied for the benefit of a resident taxpayer - other than a company - represents an amount of attributable income of a non-resident trust estate that has previously been included in the assessable income of any taxpayer
- the distribution paid or applied for the benefit of a company represents an amount of attributable income of a non-resident trust estate that has previously been included in the assessable income of that same company. This exemption applies where the company is acting as a beneficiary, not as a trustee
- the distribution is from any amount that would not have been assessable income in the hands of a resident taxpayer - for example, exempt income or non-assessable non-exempt income. This would include an amount that, if it had been derived by a resident taxpayer, would have been not assessable under section 23AH.