In using a tax loss or claiming a debt deduction, a trust needs to consider all the tests that apply to that type of trust, as shown in the following table.
|
Type of trust |
50% stake test |
Business continuity test |
Pattern of distributions test |
Control test |
Income injection test |
|---|---|---|---|---|---|
|
Non-fixed trust |
Yes |
n/a |
Yes |
Yes |
Yes |
|
Listed widely held trust |
Yes |
Yes |
n/a |
n/a |
Yes |
|
Unlisted widely held trust |
Yes |
n/a |
n/a |
n/a |
Yes |
|
Unlisted very widely held trust |
Yes |
n/a |
n/a |
n/a |
Yes |
|
Wholesale widely held trust |
Yes |
n/a |
n/a |
n/a |
Yes |
|
Fixed trust other than a widely held unit trust |
Yes |
n/a |
n/a |
n/a |
Yes |
|
Excepted trusts |
n/a |
n/a |
n/a |
n/a |
n/a |
|
Family trust |
n/a |
n/a |
n/a |
n/a |
Yes |
|
Excepted trust (other than a family trust) |
n/a |
n/a |
n/a |
n/a |
n/a |
Table notes:
- For non-fixed trusts
- the 50% stake test only applies where, at any time in the test period, individuals have more than a 50% stake in the income or capital (or both) of the trust
- the pattern of distributions test does not apply for current year loss purposes.
- For listed widely held trusts, the business continuity test can be applied if a listed widely held trust fails the 50% stake test.
- For fixed trusts other than a widely held unit trust, an alternative version to the 50% stake test is also available in certain cases where non-fixed trusts hold fixed entitlements in the fixed trust (section 266-45 of Schedule 2F).
- For family trusts, the income injection test does not apply where entities and individuals within a family group inject income into a family trust with tax losses or other deductions.
- Excepted trusts, other than family trusts include:
- complying super funds
- deceased estates within a 5 year administration period
- unit trusts that are a fixed trust where all the unit holders are exempt from income tax.