INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 235 - Particular financial transactions  

Subdivision 235-I - Instalment trusts  

Operative provisions

SECTION 235-820   Look-through treatment for instalment trusts  

235-820(1)  
If an entity (the investor ) has a beneficial interest in an *instalment trust asset under an *instalment trust, the asset is treated as being the investor ' s asset (instead of being an asset of the trust).

Example:

A dividend in respect of the asset is paid to the trustee. It is treated (but not for the purposes of the PAYG withholding provisions mentioned in paragraph 235-815(2)(b) ) as if it had been paid directly to the investor.

235-820(2)  
An act done in relation to an *instalment trust asset of an *instalment trust by the trustee of the trust is treated as if the act had been done by the investor (instead of by the trustee).

Example:

A trustee disposes of the asset. Any capital gain or loss is made by the investor, not by the trustee.

235-820(3)  
The investor is treated as having the *instalment trust asset in the same circumstances as the investor actually has the interest in the *instalment trust.

235-820(4)  
Without limiting subsection (3), the circumstances include:


(a) whether the interest is held on capital account or on revenue account; and


(b) whether the interest is held as a joint tenant or tenant in common.

235-820(5)  
Any consequence arising under the *GST Act for the trustee of the *instalment trust, as a result of anything done in relation to the *instalment trust asset, is treated as if it had arisen for the investor (instead of for the trustee), even if that consequence would not have arisen had the thing been done by or to the investor.

Example:

If the trustee has a net input tax credit under the GST Act, the investor must apply the credit to reduce the investor ' s cost base for the instalment trust asset (even if the investor is not registered or required to be registered for GST purposes): see section 103-30 .


 

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