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If you are an attributable taxpayer in relation to a non-resident trust estate, all the attributable income of the non-resident trust estate for an income year coinciding with your income year is included in your assessable income.
If there is more than one attributable taxpayer, the Tax Office may allow a reduction of the amount of attributable income to be included in the assessable income of each attributable taxpayer. To obtain the reduction, the taxpayer must apply to the Tax Office - see subsection 3 for more information.
Resident for part of a year
If you are a resident for only part of the income year, the attributable income included in your assessable income is reduced. The amount included is worked out as follows:
Notional attributable income
the number of days during
the period that you were a resident
total number of days in the period
George is a resident of Australia for 200 days out of the 365 days in the income year 1 July 2003 to 30 June 2004. He is an attributable taxpayer in relation to YZ trust that was a non-resident trust with the same income year. The attributable income of the trust estate was $40,000.
The amount George is required to include in assessable income for 2003-04 is:
$40,000 x (200/365) = $21,917
Overlapping years of income
If you are an attributable taxpayer and your income year is different from that of a non-resident trust estate, the trust estate's attributable income for the two income years which overlap your income year is apportioned using the number of days that fall within your current income year.
Overlapping years of residency
Helen's current income year is 1 July 2003 to 30 June 2004. She is an attributable taxpayer in relation to XY trust estate. The trust estate's income years are 1 January 2003 to 31 December 2003 and 1 January 2004 to 31 December 2004. The attributable income of the trust estate is $30,000 for the 2003 income year and $40,000 for the 2004 income year.
The amount worked out for the trust estate's 2003 income year is:
$30,000 x (184 [divided by] 365) = $15,123
For the trust estate's 2004 income year, the amount is:
$40,000 x (181 [divided by] 365) = $19,835
Helen adds the amounts to give a total attributable income of $34,958 for her 2003-04 income year.
Partnerships and trusts
The attributable income from a trust estate is included in working out the net income of a partnership or a trust estate and is treated as having a foreign source.
Where a partner of a partnership or a beneficiary of a trust estate is an Australian resident for the whole income year, they are to include in their assessable income their share of the net income - including attributable income - of the partnership or trust estate.
Where a partner or beneficiary is a non-resident of Australia at all times during an income year, they would not include any attributable income of the partnership or trust estate in their assessable income.
Last modified: 05 Dec 2006QC 18000