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

Schedule 9   Non-resident trustee beneficiaries

Income Tax Rates Act 1986

33   Transitional provision - intermediaries

(1) This item applies in relation to the following income years:

(a) the first income year starting on or after 1 July 2006;

(b) the income year immediately prior to the first income year starting on or after the first 1 July after the day on which this Act receives the Royal Assent;

(c) each intervening income year (if any).

(2) In this item, expressions mean the same as in the Income Tax Assessment Act 1997.

(3) Subsection 98(4) of the Income Tax Assessment Act 1936, as inserted by item 1 of this Schedule, does not apply to a trustee of a trust in relation to so much of the net income of the trust of an income year to which this item applies as:

(a) represents income applied by the trustee in making a payment covered by subitem (4); and

(b) is attributable to a payment made by a trustee of another trust, if the conditions in subitems 32(4) to (6) of this Schedule are satisfied for the other trust for the income year in which the payment made by the trustee of the other trust is made.

(4) A payment made by a trustee of a trust is covered by this subitem if:

(a) the payment is made to an entity that is a foreign resident at the time of the payment; and

(b) at the time of the payment, the trust is carrying on a business that consists predominantly of providing a custodial or depository service (as defined by section 766E of the Corporations Act 2001) pursuant to an Australian financial services licence (as defined by section 761A of that Act); and

(c) the payment is made in the course of the business; and

(d) either:

(i) the trust is a resident trust estate for the purposes of Division 6 of Part III of the Income Tax Assessment Act 1936 for the income year in which the payment is made; or

(b) the business is carried on in Australia through an Australian permanent establishment.