ATO Interpretative Decision
ATO ID 2002/1070 (Withdrawn)
Income Tax
Trust with Nil net income - refund of imputation credits.FOI status: may be released
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This ATO Interpretative Decision is withdrawn from the database due to legislative changes to Part IIIAA of the Income Tax Assessment Act 1936 which took effect from 14 September 2006. Despite its withdrawal, this ATO ID continues to be a precedential view in respect of decisions up until that time.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is a discretionary trust, with a nil net income or net loss for an income year ending on or after 22 May 2001, entitled to a refund of excess imputation credits on dividends paid on or after 1 July 2000 under Division 67 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Decision
No. A discretionary trust with a nil net income or a net loss is not entitled to a refund of excess imputation credits under Division 67 of the ITAA 1997?
Facts
A discretionary trust has a nil net income or a net loss for an income year ending on or after 22 May 2001.
The trust receives franked dividend income with franking credits.
Reasons for Decision
Division 67 of the ITAA 1997 deals with the refunding of excess imputation credits.
Taxpayers eligible for the refund are resident:
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- Individuals;
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- trustees liable to be assessed under section 99 of the Income Tax Assessment Act 1936 (ITAA 1936);
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- superannuation funds;
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- approved deposit funds;
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- life assurance companies (in respect of their superannuation business);
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- registered organisations (in respect of their superannuation business);
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- pooled superannuation trusts, and
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- certain registered charitable and gift deductible organisations.
Subsection 67-25(1B) of the ITAA 1997 makes it clear that trustees entitled to a franking credit under section 160AQY of the ITAA 1936 can only receive a refund of any excess imputation credits if they are liable to be assessed under section 99 of the ITAA 1936.
In the case of a discretionary trust with no net income or a net loss the trustee has no liability to be assessed under section 99 of the ITAA 1936 and is not entitled to a refund of excess imputation credits.
Date of decision: 16 September 2002
Legislative References:
Income Tax Assessment Act 1997
Division 67
section 67-25
subsection 67-25(1)
subsection 67-25(1B)
section 99
section 99A
Section 160AQY Related ATO Interpretative Decisions
ATO ID 2002/1071 ATO Interpretative Decisions overturned by this decision
ATOID 2001/293 (Withdrawn Amendment to legislation)
Keywords
Trusts
Discretionary trusts
Precedent
Refund of imputation credits
ISSN: 1445-2782
| Date: | Version: | |
| 16 September 2002 | Original statement | |
| You are here | 13 March 2012 | Archived |