Tax Laws Amendment (2007 Measures No. 3) Act 2007 (79 of 2007)

Schedule 10   Distributions to foreign residents from managed investment trusts

Part 1   Main amendments

Taxation Administration Act 1953

2   At the end of Subdivision 18-A in Schedule 1

Add:

Entitlement to credit: amount attributable to fund payment

18-50 Credit: amount attributable to fund payment

(1) This section applies to an entity if:

(a) the entity is a beneficiary of a trust and the assessable income of the entity for an income year includes an amount (the assessable amount ) under section 97, 99F or 100 of the Income Tax Assessment Act 1936; or

(b) the entity is a trustee of a trust and is assessed and is liable to pay tax under section 99 or 99A of that Act on an amount (also the assessable amount ) for an income year;

and an assessment has been made of the income tax payable by the entity for the income year.

(2) The assessable amount includes any amount included in the assessable income of the beneficiary because of subsection 115-215(3) of the Income Tax Assessment Act 1997.

(3) The entity is entitled to a credit if the assessable amount is represented by or reasonably attributable to a *withholding payment from which an amount was withheld under Subdivision 12-H (about distributions to foreign residents from managed investment trusts).

(4) The amount of the credit is worked out using the formula:

where:

attributable part of the payment is so much of the assessable amount as is represented by or reasonably attributable to the *withholding payment.

(5) Paragraph (1)(a) does not apply to a beneficiary of a trust in relation to an amount included in the beneficiary’s assessable income under section 97 of the Income Tax Assessment Act 1936 if the beneficiary has the amount included in the capacity of a trustee of another trust.

(6) However, subsection (5) does not stop paragraph (1)(a) applying to a trustee of:

(a) a *complying superannuation fund, a *non-complying superannuation fund, a *complying approved deposit fund, a *non-complying approved deposit fund or a *pooled superannuation trust; or

(b) a *corporate unit trust; or

(c) a *public trading trust.