Taxation Administration Act 1953
Note: See section 3AA .Chapter 2 - Collection, recovery and administration of income tax
The object of this section is to ensure that the total of the *fund payments that the trustee of a trust makes in relation to an income year equals, as nearly as practicable, the net income of the trust for the income year, disregarding these amounts ( excluded amounts ):
(a) a dividend (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936 ) that is subject to, or exempted from, a requirement to withhold under Subdivision 12-F ;
(b) interest (as so defined) that is subject to, or exempted from, such a requirement;
(c) a *royalty that is subject to, or exempted from, such a requirement;
(d) a *capital gain or *capital loss from a *CGT event that happens in relation to a *CGT asset that is not *taxable Australian property;
(e) amounts that are not from an *Australian source;
and disregarding deductions relating to excluded amounts.12-405(1A)
This section applies to a trust that is not an *AMIT for an income year.
For the definition of fund payment in respect of a trust that is an AMIT for an income year, see section 12A-110 .
Work out as follows how much of a payment (the actual payment ) made by the trustee of a trust in relation to an income year is a fund payment in relation to that year: Method statement
Reduce the actual payment by so much of it that is attributable to excluded amounts, and increase it by any amounts to which subsection (2A) or (2B) applies for the income year (except to the extent that capital gains against which those amounts are applied are included in the actual payment made in relation to the income year).
Work out what it is reasonable to expect will be the *net income of the trust for the income year:
The fund payment is so much of the step 2 amount as is reasonable having regard to:
(a) during an income year, a *capital loss from a *CGT event happens in relation to a *CGT asset that is not *taxable Australian property; and
(b) in relation to that income year, some or all of the capital loss is applied against a *capital gain from a CGT event that happens in relation to a CGT asset that is taxable Australian property;
this subsection applies, for that income year, to the amount that is so applied.
(a) the trust has a *net capital loss for an income year; and
(b) one or more of the *capital losses the trust made during that income year were from *CGT events that happened in relation to *CGT assets that were not *taxable Australian property; and
(c) in relation to a later income year, some or all of the net capital loss is applied against a *capital gain from a CGT event that happens in relation to a CGT asset that is taxable Australian property;
this subsection applies, for the later income year, to an amount equal to so much of the net capital loss that is so applied as related to capital losses mentioned in paragraph (b).
The expected *net income of the trust and the expected amounts of future *fund payments are to be worked out on the basis of the trustee ' s knowledge when the actual payment is made. 12-405(4)
However, an amount is not a fund payment in relation to the income year unless it is paid:
(a) during the income year; or
(b) within 3 months after the end of the income year; or
(c) within a longer period (starting at the end of the period referred to in paragraph (b) and not exceeding 3 months) allowed by the Commissioner. 12-405(5)
The Commissioner may allow a longer period as mentioned in paragraph (4)(c) only if the Commissioner is of the opinion that the trustee was unable to make the payment during the income year, or within 3 months after the end of the income year, because of circumstances beyond the influence or control of the trustee.
Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited
CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.
The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.