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Ruling
Subject: Corporate trustee's requirement to lodge income tax returns
Question 1
Will the corporate trustees of a SMSF and its associate be required to lodge income tax returns under section 161 of the Income Tax Assessment Act 1936 ITAA 1936?
Answer
No
This ruling applies for the following periods:
1 July 2010 to 30 June 2011
The scheme commences on:
1 July 2010
Relevant facts and circumstances
The rulee is a corporate trustee of an entity.
Its associate is another entity who borrowed funds on behalf of the entity.
There is a bare trust arrangement between the trustee of the entity and the trustee of the other entity.
The entity has lodged an income tax return.
Neither the corporate trustees nor the other entity have earned any income in its own right.
Relevant legislative provisions
Income Tax Assessment Act 1936, Subsection 161(1)
Legislative instrument TPAL 2011/1
Reasons for decision
The requirement to lodge a taxation return is established in section 161 of the ITAA36. Pursuant to subsection 161(1) of the ITAA 1936, every person must, if required by the Commissioner by notice published in the Gazette, give to the Commissioner a return for a year of income within the period specified in the notice.
Legislative instrument TPAL 2011/1 issued by the Commissioner for the year ended 30 June 2011 requires lodgement of income tax and annual returns in accordance with section 161 of the Income Tax Assessment Act 1936 and section 35D of the Superannuation Industry (Supervision) Act 1993 for an income year by specifying who is to lodge and to stipulate the date by which they are to lodge.
An extract of the legislative instrument is provided:
Lodgement of Income Tax Returns
In accordance with section 161 and related provisions of the Income Tax Assessment Act 1936 I require every person described in Tables A, B, C, D, E, F, G, H, I, J, K or L to give me a return of income for the year of income ended 30 June 2011 (or approved period in lieu).
Table A, B, C, D, E, F, G, H, I, J, and K have been deleted for the purposes of this ruling.
Table L
Where the trustee of a trust estate has derived income (including capital gains) and the trustee is not covered by Tables M, N or O, a trust return is required to be lodged by the trustee resident in Australia. If there is no trustee resident in Australia, the return is to be lodged by the trust's public officer or, where no public officer is appointed, by the trust's agent in Australia.
In this case the trustees are not covered by Tables M, N or O.
The entity has already lodged its own income tax return.
Neither the corporate trustees nor the other entity derived any income in its own right.
As such, the corporate trustees will not need to lodge income tax returns for that period
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