Income Tax Assessment Act 1936

SCHEDULE 2F - TRUST LOSSES AND OTHER DEDUCTIONS  

Division 272 - Interpretation  

Subdivision 272-F - Widely held unit trust  

SECTION 272-105   WIDELY HELD UNIT TRUST  

Basic meaning

272-105(1)  


A trust is a widely held unit trust if:


(a) it is a fixed trust that is a unit trust; and


(b) it is not closely held (see subsection (2)).

A trust is also a widely held unit trust if it is an AMIT (including an AMIT arising from the operation of section 276-20 (Trust with classes of interests - each class treated as separate AMIT)).

Closely held - income test

272-105(2)  
A trust is closely held if:


(a) an individual has, or up to 20 individuals have between them; or


(b) no individual has, or no individuals have between them;

directly or indirectly and for their own benefit, fixed entitlements to a 75% or greater share of the income of the trust.

Closely held - capital test

272-105(2A)  
A trust is also closely held if:


(a) an individual has, or up to 20 individuals have between them; or


(b) no individual has, or no individuals have between them;

directly or indirectly and for their own benefit, fixed entitlements to a 75% or greater share of the capital of the trust.

Single individual

272-105(3)  
For the purposes of subsection (2) or (2A), all of the following are taken to be a single individual:


(a) an individual, whether or not the individual holds units in the unit trust; and


(b) the individual ' s relatives; and


(c) in relation to any units in respect of which other individuals are nominees of the individual or of the individual ' s relatives - those other individuals. Exception

272-105(4)  
A unit trust is not a widely held unit trust if, because of:


(a) any provision in the trust instrument, or in any contract, agreement or instrument:


(i) authorising the variation or abrogation of rights attaching to any of the units; or

(ii) relating to the conversion, cancellation, extinguishment or redemption of any of the units; or


(b) any contract, agreement, arrangement, option or instrument under which a person has power to acquire any of the units; or


(c) any power, authority or discretion in a person in relation to the rights attaching to any of the units;

it is reasonable to conclude that the rights attaching to any of the units are capable of being varied or abrogated in such a way (even if they are not in fact varied or abrogated in that way) that directly or indirectly the requirement in paragraph (1)(b) would not be satisfied.


 

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