This part helps you determine whether you are subject to the transferor trust measures. It also shows how to work out the amount to include in your assessable income if the measures do apply.
Are you a transferor in relation to a non-resident trust estate? |
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Are you subject to the transferor trust measures? |
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What amount do you have to include in your assessable income?
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Section 1: Are you a transferor in relation to a non-resident trust estate?
Transfers of property or services
If you have transferred property or services to a non-resident trust estate, the profits of the trust may be attributed to you - that is, the profits may be included in your assessable income even though you have not received a distribution from the trust.
You will be regarded as a transferor if you:
- have at any time transferred property or services to a non-resident discretionary trust estate, or
- transferred property or services after 7.30pm on 12 April 1989 to a non-resident trust estate that is non-discretionary for either no consideration or for consideration less than an arm's length amount.
Deemed transfers
Certain transfers of property or services made to another entity may be deemed to have been made to a trust estate if the transfer is connected with a transfer to the trust estate.
Example 1: Deemed transfer to a trust estate
Entity A transfers property to Entity B on condition that Entity B transfers the property to a trust estate. In this case, Entity A would be deemed to have transferred to the trust estate the property transferred by Entity B.
End of example
Example 2: Marketing of units in a unit trust
The trustee of a unit trust issues units to Entity A, which acts as manager, underwriter or dealer for the placement of the units. Entity A then disposes of the units to Entity B, which transfers property or services to Entity A as consideration for the acquisition of the units.
In this case, Entity B is deemed to have transferred the property or services that Entity A originally transferred to the unit trust. In the circumstances, Entity A will not be taken to have transferred property or services to the trust estate.
End of exampleWhere a partnership has transferred property or services to a non-resident trust estate, each partner is deemed to have transferred property or services in proportion to their interest in the partnership.
Where a trust estate has transferred property or services to a non-resident trust estate, each person who has transferred property or services to the first-mentioned trust estate is deemed to have transferred property or services to the second-mentioned trust estate.
If the partnership or trust estate is in existence at the end of the non-resident trust estate's year of income, any attributable income of the non-resident trust estate is attributed to the partnership or trust estate. If the partnership or trust estate is not in existence at the end of the non-resident trust estate's year of income, any attributable income of the non-resident trust estate is attributed to the partners of the partnership or the original transferors to the trust estate.
The Tax Office may also treat you as having transferred property or services to a trust if you benefited from a transfer by a company, partnership or trust that ceases to exist.
If you need further information on deemed transfers, contact the Tax Office.