Income Tax Assessment Act 1936

Div 6B repealed by No 53 of 2016, s 3 and Sch 5 item 3, applicable to assessments for income years starting on or after 1 July 2016. No 53 of 2016 (as amended by No 15 of 2019), s 3 and Sch 5 Pt 4 contains the following transitional provision:

Part 4 - Transitional

75 Transitional rule for 20% tracing requirement and repeal of Division 6B - imputation  
(1)
This item applies if at a time (the cessation time ), on or after the commencement of this Schedule, either:

(a) section 102K of the Income Tax Assessment Act 1936 ceases to apply to the trustee of a trust because of the repeal of that section by Part 2 of this Schedule; or

(b) section 102S of that Act ceases to apply to the trustee of a trust because of the amendment made by Part 1 of this Schedule.

(2)
Subitems (3) and (3A) apply if:

(a) an event happens in respect of the trust that is described in:

(i) the table in subsection 205-15(1) of the Income Tax Assessment Act 1997 ; or

(ii) the table in subsection 205-30(1) of that Act; and

(b) the event happens on or after the cessation time but before 1 July 2019; and

(c) the event is:

(i) the trust paying income tax for an income year starting before 1 July 2016; or

(ii) the trust paying a PAYG instalment in respect of income tax for an income year starting before 1 July 2016; or

(iii) the trust receiving a refund of income tax for an income year starting before 1 July 2016; or

(iv) the trust franking a distribution; or

(v) the trust ceasing to be a franking entity.

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S 75(2) amended by No 15 of 2019, s 3 and Sch 1 items 34 - 36, by substituting " Subitems (3) and (3A) apply " for " Subitem (3) applies " , " 1 July 2019 " for " 1 July 2018 " in para (b) and inserting para (c)(v), effective 1 April 2019 and applicable in relation to the 2018-19 income year and later income years.

(2A)
However, subparagraph (2)(c)(v) does not apply unless the trust ' s franking account is in surplus immediately before the trust ceases to be a franking entity.

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S 75(2A) inserted by No 15 of 2019, s 3 and Sch 1 item 37, effective 1 April 2019 and applicable in relation to the 2018-19 income year and later income years.

(3)
For the purposes of determining whether a franking credit or franking debit arises in the trust ' s franking account as a result of the event:

(a) treat the trust as a corporate tax entity at the time the event happens; and

(b) treat the trust as satisfying the residency requirement in section 205-25 of the Income Tax Assessment Act 1997 for the income year in which the event happens.

(3A)
If the event is an event described in item 4 of the table in subsection 205-30(1) of the Income Tax Assessment Act 1997 , treat the event as happening on 1 July 2019.

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S 75(3A) inserted by No 15 of 2019, s 3 and Sch 1 item 38, effective 1 April 2019 and applicable in relation to the 2018-19 income year and later income years.

(4)
Subitems (5) and (6) apply if:

(a) the trust makes a distribution on or after the cessation time but before 1 July 2019; and

(b) the trust ' s franking account is in surplus just before the trust makes the distribution; and

(c) the distribution is not made out of income derived in relation to the 2016-17 income year or a later income year.

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S 75(4) amended by No 15 of 2019, s 3 and Sch 1 items 39 - 41, by substituting " Subitems (5) and (6) apply " for " Subitem (5) applies " , " 1 July 2019 " for " 1 July 2018 " in para (a) and inserting para (c), effective 1 April 2019 and applicable in relation to the 2018-19 income year and later income years.

(5)
For the purposes of determining whether the trust franks the distribution as a result of the event:

(a) treat the trust as a corporate tax entity at the time it makes the distribution; and

(b) treat the trust as satisfying the residency requirement in section 202-20 of the Income Tax Assessment Act 1997 at the time it makes the distribution.

(6)
Treat a beneficiary of the trust who receives the distribution as receiving, for the purposes of the income tax law, a dividend from a corporate tax entity.

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S 75(6) inserted by No 15 of 2019, s 3 and Sch 1 item 42, effective 1 April 2019 and applicable in relation to the 2018-19 income year and later income years.

Note:

As a result, the trust will satisfy the requirement in paragraph 202-5(a) of that Act in respect of the distribution. If the other requirements in section 202-5 of that Act are satisfied in respect of the distribution, this means that the trust franks the distribution.

Div 6B comprising s 102D to 102L inserted by No 154 of 1981.

S 102F repealed by No 53 of 2016, s 3 and Sch 5 item 3, applicable to assessments for income years starting on or after 1 July 2016. For transitional provision, see note under Pt III Div 6B heading. S 102F formerly read:

SECTION 102F ELIGIBLE UNIT TRUSTS  
102F(1)
For the purposes of this Division, a unit trust is an eligible unit trust in relation to a year of income if:

(a) property that, at any time during the year of income or a preceding year of income, was property of the unit trust became property of the unit trust in pursuance of an arrangement that is a prescribed arrangement in relation to a company and, at any time before the property became property of the unit trust, the property was the property of the company or an associate of the company; or

(b) in pursuance of an arrangement that is a prescribed arrangement in relation to a company, the trustee of the unit trust has, at any time during the year of income or a preceding year of income, carried on a business that, at any time before that time, had been carried on by the company or an associate of the company.

102F(2)
For the purposes of this Division, a unit trust (in this subsection referred to as the relevant unit trust ) is also an eligible unit trust in relation to a year of income if:

(a) property that, at any time during the year of income or a preceding year of income, was property of the relevant unit trust became property of the relevant unit trust in pursuance of an arrangement that is a prescribed arrangement in relation to another unit trust and, at any time before the property became the property of the relevant unit trust, the property was the property of that other unit trust or of an associate of the trustee of that other unit trust; or

(b) in pursuance of an arrangement that is a prescribed arrangement in relation to another unit trust, the trustee of the relevant unit trust has, at any time during the year of income or a preceding year of income, carried on a business that, at any time before that time, had been carried on by the trustee of that other unit trust or an associate of the trustee of that other unit trust;

and that other unit trust is in relation to the year of income, or was in relation to a preceding year of income, an eligible unit trust.

102F(3)
A reference in subsection (1) or (2), in relation to a company or trustee of a unit trust, to the property of an associate shall, in a case where the associate is the trustee of a trust estate, be read as a reference to property of that trust estate.

102F(4)
Ownership interests in a unit trust or a company that is part of a scheme for reorganising the affairs of stapled entities referred to in Subdivision 124-Q of the Income Tax Assessment Act 1997 is not property for the purposes of applying subsections (1) and (2).

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S 102F(4) inserted by No 164 of 2007 , s 3 and Sch 8 item 1, applicable to the 2006-07 year of income and later years of income.