Income Tax Assessment Act 1936
The Commissioner may give the trustee of a trust (the primary trust ) a notice in accordance with section 267-90 if the requirements of subsections (2) to (5) of this section are met. First requirement 267-85(2)
In its return of income for an income year, the primary trust:
(a) must have deducted a tax loss from an earlier income year; or
(b) must not have worked out its net income and tax loss for the income year under Division 268 ; or
(c) must have deducted an amount in relation to a debt;
where it would not be allowed to deduct the tax loss or amount in respect of the debt, or would be required to work out its net income and loss under that Division, if it did not meet a condition or conditions as mentioned in section 267-40 or 267-70 (the conditions provision ).Second requirement 267-85(3)
The Commissioner must be satisfied that the primary trust would not meet the condition or conditions if one or more trusts were not family trusts. Third requirement 267-85(4)
When the Commissioner gives the notice, for at least one of the family trusts:
(a) a trustee of the trust must be a non-resident; or
(b) the central management and control of the trust must be outside Australia. Fourth requirement 267-85(5)
The Commissioner must give the notice before the later of:
(a) 5 years after the end of the income year to which the return relates; and
(b) the end of the period during which the trustee of the primary trust is required by section 262A to retain records in relation to that income year.
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