Income Tax Assessment Act 1936
View history note
Hide history noteDiv 6B repealed by No 53 of 2016, s 3 and Sch 5 item 3, applicable to assessments for income years starting on or after 1 July 2016. No 53 of 2016 (as amended by No 15 of 2019), s 3 and Sch 5 Pt 4 contains the following transitional provision:
Part 4 - Transitional
75 Transitional rule for 20% tracing requirement and repeal of Division 6B - imputation
(1)
This item applies if at a time (the cessation time ), on or after the commencement of this Schedule, either:
(a) section 102K of the Income Tax Assessment Act 1936 ceases to apply to the trustee of a trust because of the repeal of that section by Part 2 of this Schedule; or
(b) section 102S of that Act ceases to apply to the trustee of a trust because of the amendment made by Part 1 of this Schedule.
(2)
Subitems (3) and (3A) apply if:
(a) an event happens in respect of the trust that is described in:
(i) the table in subsection 205-15(1) of the Income Tax Assessment Act 1997 ; or
(ii) the table in subsection 205-30(1) of that Act; and
(b) the event happens on or after the cessation time but before 1 July 2019; and
(c) the event is:
(i) the trust paying income tax for an income year starting before 1 July 2016; or
(ii) the trust paying a PAYG instalment in respect of income tax for an income year starting before 1 July 2016; or
(iii) the trust receiving a refund of income tax for an income year starting before 1 July 2016; or
(iv) the trust franking a distribution; or
(v) the trust ceasing to be a franking entity.HistoryS 75(2) amended by No 15 of 2019, s 3 and Sch 1 items 34 - 36, by substituting " Subitems (3) and (3A) apply " for " Subitem (3) applies " , " 1 July 2019 " for " 1 July 2018 " in para (b) and inserting para (c)(v), effective 1 April 2019 and applicable in relation to the 2018-19 income year and later income years.
(2A)
However, subparagraph (2)(c)(v) does not apply unless the trust ' s franking account is in surplus immediately before the trust ceases to be a franking entity.HistoryS 75(2A) inserted by No 15 of 2019, s 3 and Sch 1 item 37, effective 1 April 2019 and applicable in relation to the 2018-19 income year and later income years.
(3)
For the purposes of determining whether a franking credit or franking debit arises in the trust ' s franking account as a result of the event:
(a) treat the trust as a corporate tax entity at the time the event happens; and
(b) treat the trust as satisfying the residency requirement in section 205-25 of the Income Tax Assessment Act 1997 for the income year in which the event happens.
(3A)
If the event is an event described in item 4 of the table in subsection 205-30(1) of the Income Tax Assessment Act 1997 , treat the event as happening on 1 July 2019.HistoryS 75(3A) inserted by No 15 of 2019, s 3 and Sch 1 item 38, effective 1 April 2019 and applicable in relation to the 2018-19 income year and later income years.
(4)
Subitems (5) and (6) apply if:
(a) the trust makes a distribution on or after the cessation time but before 1 July 2019; and
(b) the trust ' s franking account is in surplus just before the trust makes the distribution; and
(c) the distribution is not made out of income derived in relation to the 2016-17 income year or a later income year.HistoryS 75(4) amended by No 15 of 2019, s 3 and Sch 1 items 39 - 41, by substituting " Subitems (5) and (6) apply " for " Subitem (5) applies " , " 1 July 2019 " for " 1 July 2018 " in para (a) and inserting para (c), effective 1 April 2019 and applicable in relation to the 2018-19 income year and later income years.
(5)
For the purposes of determining whether the trust franks the distribution as a result of the event:
(a) treat the trust as a corporate tax entity at the time it makes the distribution; and
(b) treat the trust as satisfying the residency requirement in section 202-20 of the Income Tax Assessment Act 1997 at the time it makes the distribution.
(6)
Treat a beneficiary of the trust who receives the distribution as receiving, for the purposes of the income tax law, a dividend from a corporate tax entity.HistoryS 75(6) inserted by No 15 of 2019, s 3 and Sch 1 item 42, effective 1 April 2019 and applicable in relation to the 2018-19 income year and later income years.
Note:
As a result, the trust will satisfy the requirement in paragraph 202-5(a) of that Act in respect of the distribution. If the other requirements in section 202-5 of that Act are satisfied in respect of the distribution, this means that the trust franks the distribution.
Div 6B comprising s 102D to 102L inserted by No 154 of 1981.
(Repealed by No 53 of 2016)
S 102G repealed by No 53 of 2016, s 3 and Sch 5 item 3, applicable to assessments for income years starting on or after 1 July 2016. For transitional provision, see note under Pt III Div
6B
heading. S 102G formerly read:
it is reasonable that the unit trust should be treated as a public unit trust in relation to the year of income, the unit trust shall be deemed to be a public unit trust in relation to the year of income. shall be deemed to be one person. S 102G(11) amended by No 41 of 2011, s 3 and Sch 5 Pt 27, by removing gender-specific language, effective 27 June 2011.
SECTION 102G PUBLIC UNIT TRUSTS
102G(1)
For the purposes of this Division, but subject to the succeeding provisions of this section, a unit trust is a public unit trust in relation to a year of income if, at any time during the year of income:
(a)
any of the units in the unit trust were listed for quotation in the official list of a stock exchange in Australia or elsewhere;
(b)
any of the units in the unit trust were offered to the public; or
(c)
the units in the unit trust were held by not fewer than 50 persons.
102G(2)
A unit trust shall not be taken to be a public unit trust in relation to a year of income by reason that units in the unit trust were offered to the public at any time during the year of income if the Commissioner is of the opinion that any of those units were offered to the public for the purpose, or for purposes that included the purpose, of enabling the unit trust to be treated as a public unit trust for the purposes of this Division in relation to the year of income.
102G(3)
Notwithstanding subsection (1) but subject to subsection (4), a unit trust that, but for this subsection and subsection (6), would be a public unit trust in relation to a year of income shall be deemed not to be a public unit trust in relation to the year of income if, at any time during the year of income, one person or persons not more than 20 in number held, or had the right to acquire or become the holder or holders of, a unit or units in the unit trust that entitled the holder or holders thereof to not less than 75% of:
(a)
the beneficial interests in the income of the unit trust; or
(b)
the beneficial interests in the property of the unit trust.
102G(4)
Subject to subsection (6), where by virtue of subsection (3), a unit trust would, but for this subsection, be deemed not to be a public unit trust in relation to a year of income by reason that, at any time during the year of income, one person or persons not more than 20 in number held, or had the right to acquire or become the holder or holders of, the unit or units referred to in subsection (3) and the Commissioner is of the opinion that, having regard to
-
(a)
the length of the period or the aggregate of the lengths of the periods in the year of income during which one person or persons not more than 20 in number held, or had the right to acquire or become the holder or holders of, the unit or units referred to in subsection (3); and
(b)
any other matters that the Commissioner considers relevant,
102G(5)
For the purposes of subsections (3) and (4), a person (in this subsection referred to as the
transferee
) to whom a right to acquire or become the holder of a unit in a unit trust is granted or transferred shall be deemed not to have such a right if the Commissioner is of the opinion, having regard to the financial circumstances of the transferee and to any other matters that the Commissioner considers relevant, that it was not intended by the person who granted or transferred the right to the transferee that the right would be exercised by the transferee.
102G(6)
Notwithstanding any of the preceding provisions of this section but subject to subsection (7), a unit trust that, but for this subsection, would be a public unit trust in relation to a year of income, shall be deemed not to be a public unit trust in relation to that year of income if:
(a)
not less than 75% of the total of moneys paid or credited by the trustee of the unit trust during the year of income to unitholders as unitholders, was paid or credited to one person or persons not more than 20 in number; or
(b)
the Commissioner is of the opinion that, by reason of:
(i)
any provision in the instrument by which the trust was created, or any contract, agreement or instrument authorising the variation or abrogation of the rights attaching to any of the units in the unit trust or relating to the conversion, cancellation, extinguishment or redemption of any such units;
(ii)
any contract, agreement, option or instrument under which a person has power to acquire a unit or units in the unit trust; or
the rights attaching to any of the units in the unit trust were, at any time during the year of income, capable of being varied or abrogated in such a manner (notwithstanding that they were not in fact varied or abrogated in that manner) that:
(iii)
any power, authority, or discretion in a person in relation to the rights attaching to any of the units in the unit trust;
(iv)
units in the unit trust that entitled the holder or holders thereof to not less than 75% of:
(A)
the beneficial interests in the income of the unit trust; or
would have been held by one person or persons not more than 20 in number;
(B)
the beneficial interests in the property of the unit trust;
(v)
not less than 75% of the total of moneys paid or credited by the trustee of the unit trust during the year of income to unitholders as unitholders would have been paid or credited to one person or persons not more than 20 in number; or
(vi)
in the case where no moneys were paid or credited by the trustee of the unit trust during the year of income to unitholders as unitholders
-
if moneys had been so paid or credited by the trustee of the unit trust during the year of income, not less than 75% of the amount of those moneys would have been paid or credited to one person or persons not more than 20 in number.
102G(7)
A unit trust shall not be deemed by subsection (6) not to be a public unit trust in relation to a year of income by reason that rights attaching to any of the units in the unit trust were, at any time during the year of income, capable of being varied in the manner mentioned in paragraph (6)(b) if the Commissioner is of the opinion that the person or persons who were able to vary the rights in that manner intended not to vary the rights in that manner during the year of income.
102G(8)
For the purposes of subsections (1) and (2), units in a unit trust shall be taken to be offered to the public if and only if:
(a)
an offer is made to the public or to a section of the public to subscribe for or purchase the units; or
(b)
an invitation is issued to the public or to a section of the public to make offers to subscribe for or purchase the units.
102G(9)
For the purposes of this section, where any units in a unit trust are held by the trustee of another trust estate, a person who has a beneficial interest in property of that other trust estate that consists of those units (whether or not that beneficial interest is deemed to be held by virtue of the application of this subsection) shall be deemed to hold those units.
102G(10)
For the purposes of this section, a distribution of property of a unit trust to a unitholder shall be taken to be a payment of money to the unitholder of an amount equal to the value of the property.
102G(11)
For the purposes of this section:
(a)
a person, whether or not he or she holds units in the unit trust concerned;
(b)
his or her relatives; and
(c)
in relation to any units in respect of which they are such nominees, his or her nominees and the nominees of any of his or her relatives;