Income Tax Assessment Act 1936
The consequences set out in section 270-15 result if:
(a) a deduction is allowable to a trust for the income year; and
(b) under a scheme, the following happen (in any order):
(i) the trust derives an amount of assessable income (the scheme assessable income ) in the income year; and
(ii) an outsider to the trust (see section 270-25 ) directly or indirectly provides a benefit (see section 270-20 ) to the trustee, to a beneficiary in the trust or to an associate of the trustee or of a beneficiary; and
The benefit may constitute all or any of the scheme assessable income.
(iii) the trustee, a beneficiary in the trust or an associate of the trustee or of a beneficiary, directly or indirectly provides a benefit to the outsider to the trust or to an associate of the outsider (other than an associate covered by any of paragraphs 270-25(1)(a) to (f)); and
The benefit may constitute all or any of the deduction.
(c) it is reasonable to conclude that:
(i) the trust derived the scheme assessable income; or
(ii) the outsider provided the benefit as mentioned in subparagraph (b)(ii); or
wholly or partly, but not merely incidentally, because the deduction would be allowable; and
(iii) the trustee, beneficiary or associate provided the benefit as mentioned in subparagraph (b)(iii);
(d) the trust is not an excepted trust under paragraph 272-100(b), (c) or (d) . Special case 270-10(2)
(a) under a scheme, a person who, before the scheme was entered into, was an outsider to a trust becomes:
(i) the trustee of the trust; or
(ii) a person with a fixed entitlement to a share of the income or capital of the trust; and
(b) if the person had not ceased to be an outsider to the trust, the requirements of subsection (1) would have been satisfied in relation to the scheme;
the requirements of subsection (1) are taken to have been satisfied in relation to the scheme.
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