Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-25 - PARTICULAR KINDS OF TRUSTS  

Division 276 - Australian managed investment trusts: attribution managed investment trusts  

Subdivision 276-J - Debt-like trust instruments  

Operative provisions

SECTION 276-505   Meaning of debt-like trust instrument  

276-505(1)    
An instrument that gives rise to an interest in a trust is a debt-like trust instrument in relation to the trust if:

(a) the amount of any distribution relating to the interest is fixed, at the time the interest is created, by reference to the amount subscribed for the interest; and

(b) any distribution relating to the interest is made solely at the discretion of the trustee of the trust; and

(c) rights to distributions of capital or profits arising from all interests in the trust that are in the same * class as the interest, rank above all such rights arising from other interests in the trust (other than those covered under subsection (2)) if:

(i) the trust ceases to exist; or

(ii) where the trust is a * managed investment scheme - the scheme is under administration or is being wound up; and

(d) in a case where, in relation to a particular period, the trustee of the trust does not make a distribution relating to the interest - making a distribution of any of the following kinds, in relation to that period, is prohibited by the constituent documents of the trust:

(i) a distribution relating to any membership interest in the trust;

(ii) a distribution relating to a membership interest in another entity, if that interest is stapled together with a membership interest in the trust.

276-505(2)    
This subsection covers an interest in the trust that:

(a) is not a * membership interest in the trust; or

(b) satisfies the requirements in paragraphs (1)(a) and (b).