INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-25 - PARTICULAR KINDS OF TRUSTS  

Division 275 - Australian managed investment trusts: general  

Subdivision 275-B - Choice for capital treatment of managed investment trust gains and losses  

SECTION 275-110   MIT not to be trading trust  

275-110(1)  


An entity that is a trust meets the requirement in this section at a time if the entity is not, at that time, a trading trust for the purposes of Division 6C of Part III of the Income Tax Assessment Act 1936 in relation to that income year.

275-110(2)  


If, apart from a particular circumstance, a trust would meet the requirement in subsection (1) at a time, the trust also meets the requirement in this section at a time if:


(a) the circumstance is temporary; and


(b) the circumstance arose outside the control of the trustee of the trust; and


(c) the trustee of the trust is not liable to pay income tax on the net income of the trust under section 102S of the Income Tax Assessment Act 1936 for the income year in which the time occurs; and


(d) it is fair and reasonable to treat the trust as meeting the requirement in this section at that time, having regard to the following matters:


(i) the matters in paragraphs (a), (b) and (c);

(ii) the nature of the circumstance;

(iii) the actions (if any) taken by the trustee of the trust to address or remove the circumstance, and the speed with which such actions are taken;

(iv) the extent to which treating the trust as meeting the requirement in this section at that time would increase or reduce the amount of tax otherwise payable by the trustee, the beneficiaries of the trust or any other entity;

(v) any other relevant matter.

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