4. Interposed entity election status

Instructions to help you complete your interposed entity election status.

When you must complete item 4

This item must be completed if any of the following apply:

• The company is making one or more interposed entity elections specifying a day in the 2004–05 or later income years in accordance with section 272-85 of Schedule 2F to the ITAA 1936.
• The company has previously made one or more interposed entity elections specifying a day in the income years from 1994–95 to 2021–22 in accordance with  
  • section 272-85 of Schedule 2F to the ITAA 1936, and
  • if applicable, item 23 or 23A of Schedule 1 to the Taxation Laws Amendment (Trust Loss and Other Deductions) Act 1998, and
  • at least one interposed entity election has not been revoked, in accordance with subsections 272-85(5A) to (8), in an income year before 2022–23.
• The company is revoking, from a time in 2022–23, one or more previously made interposed entity elections in accordance with section 272-85 of Schedule 2F to the ITAA 1936.

Do not attach election forms for an interposed entity election made specifying an income year before 2004–05 to the Company tax return 2023. Under section 272-85 of Schedule 2F to the ITAA 1936 a company cannot make an interposed entity election specifying a year earlier than 2004–05 in the Company tax return 2023.

For instructions on how to complete the form, see Interposed entity election or revocation 2023.

If you are not using practitioner lodgment service (PLS), and an Interposed entity election or revocation 2023 is being lodged with your Company tax return 2023, send your tax return and the Interposed entity election or revocation 2023 to:

Australian Taxation Office
GPO Box 9845
IN YOUR CAPITAL CITY

Election

If the company has not previously made, or is not currently making, any interposed entity elections, do not complete this item.

If the company is making one or more interposed entity elections specifying a day in 2004–05 or later income year, write the earliest income year specified in the box at label L. Complete an Interposed entity election or revocation 2023 for each election specifying a day in 2004–05 or later income year.

If the company has previously made one or more elections specifying a day in an income year before 2022–23, write the earliest income year specified in the box at label L unless the company is making one or more elections specifying a day in the 2004–05 or later income year.

If the company has previously made one or more elections specifying a day in an income year before 2004–05 and took advantage of the one-off opportunity in PS LA 2004/1 (GA) (Withdrawn) Lodgment opportunity for family trust and interposed entity elections to specify an earlier year, write the earliest income year specified in the box at label L unless the company is making one or more elections specifying a day in 2004–05 or later income year.

Revocation

An interposed entity election can only be revoked by a company that satisfies all of the relevant conditions in subsection 272-85 of Schedule 2F to the ITAA 1936. A revocation must be made with your tax return for the income year from which the revocation is to be effective.

Print the code R in the box at this item if the interposed entity election made by the company is being revoked from a time in 2022–23. An Interposed entity election or revocation 2023 must be completed and lodged with the Company tax return 2023.

 

 

 

 

 

Family trust distribution tax

A company may make an interposed entity election under section 272-85 of Schedule 2F to the ITAA 1936 to be included in the family group of an individual specified in a family trust election made by a trust under section 272-80 of Schedule 2F to the ITAA 1936.

A company that is wholly owned, directly or indirectly, by the relevant family will not need to make an interposed entity election to be included in the family group of the specified individual, see subsection 272-90(5) of Schedule 2F to the ITAA 1936.

A consequence of a company making an interposed entity election is that under section 271-30 of Schedule 2F to the ITAA 1936 the company pays a special tax, called family trust distribution tax (FTDT), at 47% on any conferral of present entitlement to, or distribution of, the company’s income or capital to persons who are not members of the family group of the specified individual within the meaning of section 272-90 of Schedule 2F to the ITAA 1936. For this purpose, a company’s distribution of income or capital has the meaning given in sections 272-50 and 272-60 of Schedule 2F to the ITAA 1936.

For income years commencing on or after 1 July 2007, the definition of ‘family group’ includes a former spouse, a former widow or widower, and a former stepchild.

From 1 July 2009 and later years ‘spouse’ includes another person (of any sex) who:

• you were in a relationship with that was registered under a prescribed state or territory law
• although not legally married to you, lived with you on a genuine domestic basis in a relationship as a couple.

Mail the Family trust distribution tax payment advice with your FTDT payment to the appropriate mailing address. Make cheques or money orders payable to the Deputy Commissioner of Taxation and print ‘Not negotiable’ across the cheque. Tender all cheques in Australian currency. Do not send cash by post.

Continue to: 5. Country by country reporting entities – GPFS obligation