INCOME TAX ASSESSMENT ACT 1936

PART III - LIABILITY TO TAXATION  

Division 6D - Provisions relating to certain closely held trusts  

Subdivision B - Interpretation  

SECTION 102UC   CLOSELY HELD TRUST  

102UC(1)  
A closely held trust is:


(a) a trust where an individual has, or up to 20 individuals have between them, directly or indirectly, and for their own benefit, fixed entitlements to a 75% or greater share of the income, or a 75% or greater share of the capital, of the trust; or


(b) a discretionary trust;

except where the trust is an excluded trust.

102UC(2)   Trustees of discretionary trusts treated as individuals.  

For the purposes of paragraph (1)(a), if:


(a) a trustee of a discretionary trust holds a fixed entitlement to a share of the income or capital of the trust mentioned in that paragraph directly or indirectly; and


(b) no person holds that fixed entitlement directly or indirectly through the discretionary trust;

the trustee is taken to hold that fixed entitlement directly or indirectly as an individual and for the individual's own benefit.

102UC(3)   Individuals treated as single individual.  

For the purposes of paragraph (1)(a), all of the following are taken to be a single individual:


(a) an individual, whether or not the individual holds fixed entitlements directly in the trust mentioned in that paragraph;


(b) the individual's relatives;


(c) in relation to any fixed entitlements in respect of which other individuals are nominees of the individual or of the individual's relatives - those other individuals.

102UC(4)   Definitions.  

In this section:

discretionary trust
means a trust that is not a fixed trust within the meaning of section 272-65 in Schedule 2F.

excluded trust
means:


(a) a trust to which paragraph (b), (c) or (d) of the definition of excepted trust in section 272-100 in Schedule 2F applies; or


(b) a unit trust whose units are listed on the stock market operated by ASX Limited; or


(c) a family trust; or


(d) a trust in relation to which an interposed entity election has been made and is in force in accordance with section 272-85 in Schedule 2F; or


(e) a trust that is covered by subsection 272-90(5) in Schedule 2F.

fixed entitlement
has the meaning given by sections 272-5, 272-10, 272-15 and 272-40 in Schedule 2F.

indirectly
has the meaning given by section 272-20 in Schedule 2F.


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