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Small investor exclusion

Last updated 26 May 2005

Certain small investors are exempt from the FIF measures. See Exemption for an interest of $A50,000 or less in chapter 3 for more information.

Consistent with this exemption, the FIF measures excluded FIF income from the assessable income of a resident public unit trust when working out a small investor's share of the net income of the trust estate. This exclusion applies only to natural persons and will apply to you if the sum of your interests and those of your associates in FIFs, FLPs and resident public unit trusts at the end of the income year are $50,000 or less. [subsection 96A(2)]

In a subsequent year of income, you must work out the trust's net income by ignoring attribution credits which arose during income years when you were exempt because of this small investor's exemption. [paragraph 96A(2)(d)]

This means that you as the beneficiary will not benefit from:

  • the exemption, which applies for amounts previously attributed under the FIF measures [section 23AK]
  • a reduction in the disposal consideration of the FIF interest because of an unused FIF attribution account surplus from income attributed but not distributed before disposal of the FIF interest. [section 613]

These two benefits arise because FIF income was included in the net income of the trust in a year when you as a beneficiary of the public unit trust were not taxed on that FIF income because of the small investor's exclusion. [paragraphs 96A(2)(d) to (e)]