INCOME TAX ASSESSMENT ACT 1936

PART III - LIABILITY TO TAXATION  

Division 6AAA - Special provisions relating to non-resident trust estates etc.  

Subdivision A - Preliminary  

SECTION 102AAK   DEEMED TRANSFERS OF PROPERTY OR SERVICES TO TRUST ESTATE  

102AAK(1)  
For the purposes of this Division, where an entity (in this subsection called the prime entity ) causes another entity to actually transfer property or services to a trust estate, the prime entity is taken to have transferred the property or services (instead of the other entity).

102AAK(2)  
For the purposes of this Division, where:


(a) the trustee of a trust estate issues units in the trust to an entity (in this subsection called the first entity ) in the first entity's capacity as a manager, underwriter or dealer in relation to the marketing or placement of the units; and


(b) in the course of the marketing or placement of the units, the units are disposed of by the first entity to another entity (in this subsection called the second entity ); and


(c) at a particular time (in this subsection called the second entity's transfer time ), the second entity transfers property or services to the first entity as consideration for the acquisition of the units; and


(d) the first entity has actually transferred, or actually transfers, property or services (in this subsection called the original property or services ) to the trust estate for the sole purpose of acquiring the units;

the second entity is taken to have transferred the original property or services (instead of the first entity) at the second entity's transfer time.

102AAK(3)  
A reference in subsection (2) to a unit in a trust estate is a reference to an interest (however described) in any of the income or property of the trust estate.

102AAK(4)  
Subsections (1) and (2) do not limit the operation of subsection (5).

102AAK(5)  
Where, under a scheme:


(a) an entity (in this subsection called the scheme entity ) actually transfers property or services to another entity; and


(b) property or services are actually transferred to a trust estate at a particular time otherwise than by the scheme entity;

the Commissioner may, for the purposes of this Division, treat the property or services mentioned in paragraph (b) as having been transferred by the scheme entity to the trust estate (instead of by any other entity) at that time to such extent as the Commissioner considers reasonable.

102AAK(6)  
For the purposes of this Division, if (apart from subsections (8), (10) and (11)) an entity, being a partnership, transfers property or services to a trust estate at a particular time:


(a) each partner in the partnership is taken to have transferred a part of the property or services to the trust estate at that time; and


(b) the market value of the part transferred by a particular partner is calculated using the formula:


Market value   ×   Partner's interest


where:
  • Market value means the market value, immediately before the transfer, of the property or services transferred by the partnership.
  • Partner's interest means:
  • (i) the partner's percentage interest in the profits of the partnership as at that time; or
  • (ii) the partner's percentage interest in the property of the partnership as at that time;

  • or, if they are different, whichever is the higher.

    102AAK(7)  
    Nothing in paragraph (6)(a) affects the application of this Division to the transfer made by the partnership concerned.

    102AAK(8)  
    For the purposes of this Division, if:


    (a) apart from this subsection, subsections (6), (10) and (11), an entity being the trustee of a trust estate (in this subsection called the transferor trust estate ) transfers property or services (in this subsection called the transferred property or services ) to another trust estate (in this subsection called the transferee trust estate ) at a particular time (in this subsection called the transfer time ); and


    (b) the transferor trust estate was an Australian trust, or a controlled foreign trust, at the transfer time; and


    (c) the transferor trust estate was a discretionary trust estate at the transfer time; and


    (d) apart from this subsection, subsections (6), (10) and (11), one or more other entities transferred property or services to the transferor trust estate at or before the transfer time;

    each of those other entities is taken to have transferred the transferred property or services to the transferee trust estate at the transfer time.

    102AAK(9)  
    Nothing in subsection (8) affects the application of this Division to the transfer mentioned in paragraph (8)(a).

    102AAK(10)  
    For the purposes of this Division, where:


    (a) any of the following subparagraphs applies:


    (i) any of the following events occurs in relation to a company (which company is in this subsection called the transferor ):

    (A) the company passes a resolution for its winding-up;

    (B) an order is made for the winding-up of the company;

    (C) any similar event;

    (ii) a partnership (in this subsection also called the transferor ) ceases to exist for the purposes of this Act;

    (iii) either of the following sub-subparagraphs applies in relation to the trustee of a trust estate (in this subsection also called the transferor );

    (A) the trust estate commences to be wound-up;

    (B) the trust estate ceases to exist for the purposes of this Act; and


    (b) an actual transfer of property or services is made to a trust estate (in this subsection called the transferee ) as a consequence of the transferor being wound-up or ceasing to exist;

    the transferor is taken to have transferred to the transferee the property or services concerned.

    102AAK(11)  


    For the purposes of this Division, where:


    (a) the following subparagraphs apply to an entity (in this subsection called the defunct entity ):


    (i) the defunct entity is a company, a partnership or the trustee of a trust estate;

    (ii) the defunct entity transferred property or services to a trust estate (including a transfer that was taken to have been made because of another application or other applications of this subsection) at a particular time;

    (iii) if the defunct entity is a company - any of the following events occurs:

    (A) the company passes a resolution for its winding-up;

    (B) an order is made for the winding-up of the company;

    (C) any similar event;

    (iv) if the defunct entity is a partnership - the partnership ceases to exist for the purposes of this Act;

    (v) if the defunct entity is a trustee of a trust estate - either of the following sub-subparagraphs applies:

    (A) the trust estate commences to be wound-up;

    (B) the trust estate ceases to exist for the purposes of this Act; and


    (b) the Commissioner is satisfied that another entity (in this subsection called the successor entity ) has benefited or is capable (whether by the exercise of a power of appointment or otherwise) of benefiting (either directly or indirectly through one or more interposed companies, partnerships or trusts) by, or as a result of:


    (i) a transfer of property or services made by the defunct entity; or

    (ii) a transfer of property or services made as a consequence of the defunct entity being wound-up or ceasing to exist; and


    (c) the Commissioner is of the opinion that it is appropriate to apply this subsection to the successor entity;

    the assessable income of the successor entity of the year of income in which the event, or the earliest event, mentioned in subparagraph (a)(iii), (iv) or (v) occurred and of each subsequent year of income is to be determined as if the successor entity had transferred to the trust estate mentioned in subparagraph (a)(ii), at the time mentioned in that subparagraph:


    (d) the whole of the property or services mentioned in that subparagraph; or


    (e) if the Commissioner thinks it appropriate - a part of the property or services referred to in that subparagraph.


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