TAXATION ADMINISTRATION ACT 1953
Note: See section 3AA .Chapter 2 - Collection, recovery and administration of income tax
This section applies if:
(a) the trustee of a trust makes a distribution to a beneficiary of the trust at a time (the distribution time ) during an income year of the trust; and
(b) some or all of the distribution is from the *ordinary income or *statutory income of the trust; and
(c) the trust is:
(i) a resident trust estate (within the meaning of subsection 95(2) of the Income Tax Assessment Act 1936 ) in relation to the income year; and
(ii) a closely held trust (within the meaning of section 102UC of that Act, disregarding paragraphs (c), (d) and (e) of the definition of excluded trust in subsection (4) of that section); and
(iii) not prescribed by the regulations for the purposes of this subparagraph; and
(d) the beneficiary is:
(i) an Australian resident; and
(ii) not an *exempt entity; and
(iii) not under a legal disability for the purposes of section 98 of that Act.
[ CCH Note: S 12-175(1) will be amended by No 95 of 2019, s 3 and Sch 4 item 5, by omitting " , disregarding paragraphs (c), (d) and (e) of the definition of excluded trust in subsection (4) of that section " from para (c)(ii), effective 1 January 2020 and applicable in relation to years of income starting on or after 1 July 2019.]
The trustee must withhold an amount from the distribution, if:
(a) the beneficiary did not *quote the beneficiary ' s *tax file number to the trustee before the distribution time; and
(b) the trustee is not liable to pay tax under section 98 of the Income Tax Assessment Act 1936 in connection with the distribution; and
(c) the trustee is not required to make a correct TB statement under Division 6D of Part III of that Act (about trustee beneficiary non-disclosure tax) in connection with the distribution; and
(d) family trust distribution tax is not payable under Schedule 2F to that Act in connection with the distribution.
The trustee commits an offence if the trustee fails to withhold an amount as required by this section: see section 16-25 .Application of rest of Part 12-175(3)
If the distribution is not a payment, this Part applies as if the trustee paid the amount of the distribution to the beneficiary at the distribution time. Trust income of earlier income years 12-175(4)
Subsections (2) and (3) do not apply to the distribution, to the extent that:
(a) the beneficiary is presently entitled, for the purposes of Division 6 of Part III of the Income Tax Assessment Act 1936 , to a share of the income of the trust of an earlier income year; and
(b) the distribution is a distribution of some or all of that share.
The trustee may have been required to withhold from that share under section 12-180 .
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