INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-6 - THE IMPUTATION SYSTEM  

Division 207 - Effect of receiving a franked distribution  

Subdivision 207-B - Franked distribution received through certain partnerships and trustees  

Key concepts

SECTION 207-58   Specifically entitled to an amount of a franked distribution  

207-58(1)  
A beneficiary of a trust estate is specifically entitled to an amount of a *franked distribution made to the trust estate in an income year equal to the amount calculated under the following formula:


*Franked distribution × Share of net financial benefit
Net financial benefit

where:

net financial benefit
means an amount equal to the *financial benefit that is referable to the *franked distribution (after any application by the trustee of expenses that are directly relevant to the franked distribution).

share of net financial benefit
means an amount equal to the *financial benefit that, in accordance with the terms of the trust:


(a) the beneficiary has received, or can be reasonably expected to receive; and


(b) is referable to the *franked distribution (after application by the trustee of any expenses that are directly relevant to the franked distribution); and


(c) is recorded, in its character as referable to the franked distribution, in the accounts or records of the trust no later than the end of the income year.

207-58(2)  
To avoid doubt, for the purposes of subsection (1), something is done in accordance with the terms of the trust if it is done in accordance with:


(a) the exercise of a power conferred by the terms of the trust; or


(b) the terms of the trust deed (if any), and the terms applicable to the trust because of the operation of legislation, the common law or the rules of equity.


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