Under legislative changes that took effect on 1 July 2007, an interposed entity election can be revoked in certain limited circumstances. See, subsection 272-85(5A) of Schedule 2F to the ITAA 1936. Generally, an interposed entity election can be revoked if, at the election commencement time, the interposed entity was, or at a later time it becomes, a member of the family group of the individual specified in the family trust election. This may occur where the interposed entity:
- is a trust and has made a family trust election with the same specified individual as the family trust in respect of which the interposed entity election was made –in accordance with subsection 272-90(3A) of Schedule 2F to the ITAA 1936, family trusts with the same specified individual will be members of each other’s family group without having to make interposed entity elections in respect of each other, or
- is, or becomes, wholly owned by members of the family of the individual specified in the family trust election in accordance with subsection 272-90(5) of Schedule 2F to the ITAA 1936, and therefore is a member of the family group without the need for an interposed entity election.
The interposed entity must also satisfy the related conditions in subsections 272-85(5C) and (6) of Schedule 2F to the ITAA 1936 which includes specific time periods during which an interposed entity election can be revoked in these situations.
Continue to: Instructions to complete the interposed entity election or revocation