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Edited version of private ruling
Authorisation Number: 1011811337342
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Ruling
Subject: Family Trust and Interposed Entity Elections (FTE & IEE)
Question 1
Did the trustee of the X Trust make a valid FTE under Schedule 2F to the Income Tax Assessment Act 1936 (ITAA 1936)?
Answer
No
Question 2
Did the trustee of the X Trust make a valid IEE under Schedule 2F to the (ITAA 1936)?
Answer
No.
Question 3
Will a distribution of income or capital to a beneficiary who was not a member of the primary individual's family group be subject to Family Trust Distribution Tax (FTDT), under Division 271 of Schedule 2F to the ITAA 1936, where the FTE and the IEE were not validly made?
Answer
No, a distribution of income or capital will not be subject to FTDT as the FTE and the IEE were not validly made.
This ruling applies for the following period
Year ending 30 June 2012
The scheme commences on
1 July 2005
Relevant facts and circumstances
The X Trust is a unit trust.
A Co is the trustee of the X trust.
The X Trust made an FTE and an IEE for the 1996 income year effective from 1 July 1995.
The elections were signed by person who was not an authorised representative of the trustee company.
Reasons for Decision
Under subitems 22(3) and 23(3) of Schedule 1 to the Taxation Laws Amendment (Trust Loss and Other Deductions) Act 1998, the Commissioner required in the notes annexed to the 1998 FTE and IEE paper forms that the paper form must be signed by the company public officer, where the trustee was a company.
The person who signed the elections was not a director, secretary or the Public Officer of A Co at the time she signed the paper forms. She was not a representative of A Co in any capacity when she signed the paper forms, the elections were not made in a form approved by the Commissioner and therefore were not validly made.
As the elections were not validly made, Division 271 of Schedule 2F to the ITAA 1936 does not apply.