INCOME TAX ASSESSMENT ACT 1936

PART III - LIABILITY TO TAXATION  

Division 6 - Trust income  

SECTION 98   LIABILITY OF TRUSTEE  

98(1)  


Where a beneficiary of a trust estate who is under a legal disability is presently entitled to a share of the income of the trust estate, the trustee of the trust estate shall be assessed and liable to pay tax in respect of:


(a) so much of that share of the net income of the trust estate as is attributable to a period when the beneficiary was a resident; and


(b) so much of that share of the net income of the trust estate as is attributable to a period when the beneficiary was not a resident and is also attributable to sources in Australia;

as if it were the income of an individual and were not subject to any deduction.

98(2)   [Beneficiary presently entitled by virtue of s 95A(2)]  

Where a beneficiary of a trust estate:


(a) is deemed to be presently entitled to a share of the income of the trust estate of a year of income by virtue of the operation of subsection 95A(2) ;


(aa) is a natural person and is not, in respect of that share of the income of the trust estate, a beneficiary in the capacity of a trustee of another trust estate;


(b) is not a beneficiary to whom subsection 97A(1) or (1A) applies in relation to the year of income; and


(c) is not under a legal disability;

the trustee of the trust estate shall be assessed and liable to pay tax in respect of:


(d) so much of that share of the net income of the trust estate as is attributable to a period when the beneficiary was a resident; and


(e) so much of that share of the net income of the trust estate as is attributable to a period when the beneficiary was not a resident and is also attributable to sources in Australia;

as if it were the income of an individual and were not subject to any deduction.

98(2A)   [ Non-resident beneficiary]  

If:


(a) a beneficiary of a trust estate who is presently entitled to a share of the income of the trust estate:


(i) is a non-resident at the end of the year of income; and

(ii) is not, in respect of that share of the income of the trust estate, a beneficiary in the capacity of a trustee of another trust estate; and

(iii) is not a beneficiary to whom section 97A applies in relation to the year of income; and

(iv) is not a beneficiary to whom subsection 97(3) applies; and


(b) the trustee of the trust estate is not assessed and is not liable to pay tax under subsection (1) or (2) in respect of any part of that share of the net income of the trust estate;

subsection (3) applies to the trustee in respect of:


(c) so much of that share of the net income of the trust estate as is attributable to a period when the beneficiary was a resident; and


(d) so much of that share of the net income of the trust estate as is attributable to a period when the beneficiary was not a resident and is also attributable to sources in Australia.

98(3)   [ Liability to tax]  

A trustee to whom this subsection applies in respect of an amount of net income is to be assessed and is liable to pay tax:


(a) if the beneficiary is not a company - in respect of the amount of net income as if it were the income of an individual and were not subject to any deduction; or


(b) if the beneficiary is a company - in respect of the amount of net income at the rate declared by the Parliament for the purposes of this paragraph.

Note:

If the trust estate's net income includes a net capital gain, and the beneficiary is a company, Subdivision 115-C of the Income Tax Assessment Act 1997 affects the assessment of the trustee.

98(4)   [ Non-resident beneficiary a trustee of another trust]  

If:


(a) a beneficiary of a trust estate (the first trust estate ) who is presently entitled to a share of the income of the first trust estate:


(i) is, in respect of that share of the income of the first trust estate, a beneficiary in the capacity of a trustee of another trust estate; and

(ii) is not a beneficiary to whom subsection 97(3) applies; and


(b) a trustee of the other trust estate is a non-resident at the end of the year of income;

the trustee of the first trust estate is to be assessed and is liable to pay tax in respect of so much of that share of the net income of the first trust estate as is attributable to sources in Australia at the rate declared by the Parliament for the purposes of this subsection.

Note:

If the trust estate's net income includes a net capital gain, Subdivision 115-C of the Income Tax Assessment Act 1997 affects the assessment of the trustee.


 

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