Income Tax Assessment Act 1936

SCHEDULE 2F - TRUST LOSSES AND OTHER DEDUCTIONS  

Division 272 - Interpretation  

Subdivision 272-H - Unlisted very widely held trust  

SECTION 272-120   UNLISTED VERY WIDELY HELD TRUST  

272-120(1)    
Subject to Subdivision 272-J , a unit trust is an unlisted very widely held trust if:

(a) it is an unlisted widely held trust; and

(b) it has at least 1,000 unit holders; and

(c) all of its units carry the same rights; and

(d) if its units are redeemable, they are redeemable for a price determined on the basis of its net asset value, according to Australian accounting principles; and

(e) it engages only in qualifying activities (see subsection (2)).

Qualifying activity

272-120(2)    
A qualifying activity is an activity that:

(a) is an investment or business activity; and

(b) is conducted in accordance with the trust instrument or deed, and any prospectus, of the trust; and

(c) is conducted at arm ' s length.

Extended status

272-120(3)    
If:

(a) at a particular time (the first qualifying time ), a trust for the first time becomes an unlisted very widely held trust; and

(b) at a time (the first unit issue time ) that is not more than 2 years earlier, units in the trust were first issued; and

(c) at no time during the period (the start-up period ) between the first unit issue time and the first qualifying time was there any abnormal trading, of a kind covered by subsection 269-15 (1) or section 269-20 , in the trust ' s units; and

(d) at all times in the part (if any) of the start-up period that occurred more than 90 days after it began, the trust was a widely held unit trust;

the trust is taken to have been an unlisted very widely held trust at all times from the formation of the trust until the end of the start-up period.