INCOME TAX ASSESSMENT ACT 1936

PART III - LIABILITY TO TAXATION  

Division 6 - Trust income  

SECTION 95   INTERPRETATION  

95(1)  


In this Division:

adjusted Division 6 percentage ,
of an entity that is a beneficiary or trustee of a trust estate, means the entity ' s Division 6 percentage of the income of the trust estate calculated on the assumption that the amount of a capital gain or franked distribution to which any beneficiary or the trustee of the trust estate is specifically entitled were disregarded in working out the income of the trust estate.

adjusted net income ,
in relation to a trust estate, has the meaning given by subsection 100AB(4) .

Division 6 percentage :

(a) a beneficiary of a trust estate has a Division 6 percentage of the income of the trust estate equal to the share (expressed as a percentage) of the income of the trust estate to which the beneficiary is presently entitled; and


(b) the trustee of a trust estate has a Division 6 percentage of the income of the trust estate equal to the share (expressed as a percentage) of the income of the trust estate to which no beneficiary is presently entitled.

However, if the income of a trust estate is nil:


(c) a beneficiary of a trust estate has a Division 6 percentage of the income of the trust estate of 0%; and


(d) the trustee of a trust estate has a Division 6 percentage of the income of the trust estate of 100%.

exempt income
, in relation to a trust estate, means the exempt income of the trust estate calculated as if the trustee were a taxpayer who was a resident.

Note:

See also Division 54 of the Income Tax Assessment Act 1997 (in particular, the provisions in section 54-70 about trusts), which provides a tax exemption for certain payments under structured settlements and structured orders.

net income ,
in relation to a trust estate, means the total assessable income of the trust estate calculated under this Act as if the trustee were a taxpayer in respect of that income and were a resident, less all allowable deductions, except deductions under Division 393 of the Income Tax Assessment Act 1997 (Farm management deposits) and except also, in respect of any beneficiary who has no beneficial interest in the corpus of the trust estate, or in respect of any life tenant, the deductions allowable under Division 36 of the Income Tax Assessment Act 1997 in respect of such of the tax losses of previous years as are required to be met out of corpus.

A trust may be required to work out its net income in a special way by Division 266 or 267 in Schedule 2F to this Act or Division 275 of the Income Tax Assessment Act 1997 .

non-assessable non-exempt income
, in relation to a trust estate, means the non-assessable non-exempt income of the trust estate calculated as if the trustee were a taxpayer who was a resident.

specifically entitled
has the same meaning as in the Income Tax Assessment Act 1997 .

95(2)  
For the purposes of this Division, a trust estate shall be taken to be a resident trust estate in relation to a year of income if:


(a) a trustee of the trust estate was a resident at any time during the year of income; or


(b) the central management and control of the trust estate was in Australia at any time during the year of income.

95(3)  


In this Division, a trust estate that is not a resident trust estate in relation to a year of income is referred to as a non-resident trust estate in relation to that year of income.

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