TAXATION ADMINISTRATION ACT 1953

SCHEDULE 1 - COLLECTION AND RECOVERY OF INCOME TAX AND OTHER LIABILITIES  

Note: See section 3AA .

Chapter 2 - Collection, recovery and administration of income tax  

PART 2-5 - PAY AS YOU GO (PAYG) WITHHOLDING  

Division 12 - Payments from which amounts must be withheld  

Subdivision 12-E - Payments where TFN or ABN not quoted  

Payment of income of closely held trust where TFN not quoted

SECTION 12-175   TRUSTEE DISTRIBUTES INCOME OF CLOSELY HELD TRUST  

Scope

12-175(1)  
This section applies if:

(a) the trustee of a trust makes a distribution to a beneficiary of the trust at a time (the distribution time ) during an income year of the trust; and

(b) some or all of the distribution is from the *ordinary income or *statutory income of the trust; and

(c) the trust is:

(i) a resident trust estate (within the meaning of subsection 95(2) of the Income Tax Assessment Act 1936 ) in relation to the income year; and

(ii) a closely held trust (within the meaning of section 102UC of that Act, disregarding paragraphs (c), (d) and (e) of the definition of excluded trust in subsection (4) of that section); and

(iii) not prescribed by the regulations for the purposes of this subparagraph; and

(d) the beneficiary is:

(i) an Australian resident; and

(ii) not an *exempt entity; and

(iii) not under a legal disability for the purposes of section 98 of that Act.

Trustee must withhold

12-175(2)  
The trustee must withhold an amount from the distribution, if:

(a) the beneficiary did not *quote the beneficiary ' s *tax file number to the trustee before the distribution time; and

(b) the trustee is not liable to pay tax under section 98 of the Income Tax Assessment Act 1936 in connection with the distribution; and

(c) the trustee is not required to make a correct TB statement under Division 6D of Part III of that Act (about trustee beneficiary non-disclosure tax) in connection with the distribution; and

(d) family trust distribution tax is not payable under Schedule 2F to that Act in connection with the distribution.

Note 1:

If the trust is a unit trust, the trustee may be required to withhold under section 12-140 in priority to this section: see section 12-5 .

Note 2:

The trustee commits an offence if the trustee fails to withhold an amount as required by this section: see section 16-25 .

Application of rest of Part

12-175(3)  
If the distribution is not a payment, this Part applies as if the trustee paid the amount of the distribution to the beneficiary at the distribution time. Trust income of earlier income years

12-175(4)  
Subsections (2) and (3) do not apply to the distribution, to the extent that:

(a) the beneficiary is presently entitled, for the purposes of Division 6 of Part III of the Income Tax Assessment Act 1936 , to a share of the income of the trust of an earlier income year; and

(b) the distribution is a distribution of some or all of that share.

Note:

The trustee may have been required to withhold from that share under section 12-180 .