Income Tax Assessment Act 1936

SCHEDULE 2F - TRUST LOSSES AND OTHER DEDUCTIONS  

Division 271 - Family trust distribution tax  

SECTION 271-25   TAX LIABILITY WHERE INTERPOSED PARTNERSHIP MAKES DISTRIBUTION ETC. OUTSIDE FAMILY GROUP  

271-25(1)    
This section applies if:

(a) the partners in a partnership make an interposed entity election for the partnership to be included in the family group of the individual specified in a family trust election; and

(b) at any time while the interposed entity election is in force (including a time before it was made), the partnership confers a present entitlement to, or distributes, income or capital:

(i) upon or to a person who is neither the individual specified in the family trust election nor a member of the individual ' s family group in relation to the conferral or distribution; or

(ii) upon or to the individual specified in the election or a member of the individual ' s family group, where the individual or member is the trustee of a trust, or the member is a trust, that is not included in the individual ' s family group in relation to the conferral or distribution.

271-25(2)    
If this section applies, the partners, together with each person who at the time of the conferral or distribution was a director of any partner that was a company, are jointly and severally liable to pay tax, as imposed by the Family Trust Distribution Tax (Primary Liability) Act 1998 , on the amount or value of the income or capital to which the entitlement relates, or that is distributed.