INCOME TAX ASSESSMENT ACT 1936

SCHEDULE 2F - TRUST LOSSES AND OTHER DEDUCTIONS  

Division 270 - Schemes to take advantage of deductions  

SECTION 270-10   SCHEMES TO TAKE ADVANTAGE OF DEDUCTIONS  

Basic case

270-10(1)  
The consequences set out in section 270-15 result if:


(a) a deduction is allowable to a trust for the income year; and


(b) under a scheme, the following happen (in any order):


(i) the trust derives an amount of assessable income (the scheme assessable income ) in the income year; and

(ii) an outsider to the trust (see section 270-25 ) directly or indirectly provides a benefit (see section 270-20 ) to the trustee, to a beneficiary in the trust or to an associate of the trustee or of a beneficiary; and
Note:

The benefit may constitute all or any of the scheme assessable income.


(iii) the trustee, a beneficiary in the trust or an associate of the trustee or of a beneficiary, directly or indirectly provides a benefit to the outsider to the trust or to an associate of the outsider (other than an associate covered by any of paragraphs 270-25(1)(a) to (f)); and
Note:

The benefit may constitute all or any of the deduction.


(c) it is reasonable to conclude that:


(i) the trust derived the scheme assessable income; or

(ii) the outsider provided the benefit as mentioned in subparagraph (b)(ii); or

(iii) the trustee, beneficiary or associate provided the benefit as mentioned in subparagraph (b)(iii);
wholly or partly, but not merely incidentally, because the deduction would be allowable; and


(d) the trust is not an excepted trust under paragraph 272-100(b), (c) or (d) . Special case

270-10(2)  
If:


(a) under a scheme, a person who, before the scheme was entered into, was an outsider to a trust becomes:


(i) the trustee of the trust; or

(ii) a person with a fixed entitlement to a share of the income or capital of the trust; and


(b) if the person had not ceased to be an outsider to the trust, the requirements of subsection (1) would have been satisfied in relation to the scheme;

the requirements of subsection (1) are taken to have been satisfied in relation to the scheme.


View surrounding sectionsView surrounding sectionsBack to top


This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.