Income Tax Assessment Act 1936

PART III - LIABILITY TO TAXATION  

Division 6A - Alienation of income  

SECTION 102B   CERTAIN INCOME TRANSFERRED FOR SHORT PERIODS TO BE INCLUDED IN ASSESSABLE INCOME OF TRANSFEROR  

102B(1)   [Transfer of right to receive income from property to associate]  

Subject to this section, where a right to receive income from property is transferred, otherwise than by a will or codicil, by a person (in this subsection referred to as the transferor ) to an associate of the transferor for a period that will, or may for any reason other than the death of any person or the associate becoming under a legal disability, terminate before the prescribed date, any income that:

(a) is derived from the property;

(b) is paid to, or applied or accumulated for the benefit of:

(i) the associate; or

(ii) any other associate of the transferor to whom a right to receive income from the property has been transferred (whether by the first-mentioned associate or any other person) after the first-mentioned transfer; and

(c) would, if the first-mentioned transfer had not been made, have been included in the assessable income of the transferor;

shall be treated for the purposes of this Act as if the first-mentioned transfer had not been made.

102B(2)   [Certain transfers to associates not to be disregarded]  

Subsection (1) (other than subparagraph (1)(b)(ii)) does not apply in relation to a transfer of a right to receive income from property where:

(a) the right was not a right that arose from the ownership by the transferor of an interest in the property;

(b) the right arose from the ownership by the transferor of an interest in the property and, before or at the time of the first-mentioned transfer, the transferor transferred that interest to the transferee or another person; or

(c) consideration has been received or is receivable in respect of the transfer and the amount of that consideration is not less than the arm's length consideration in respect of the transfer.

102B(3)   [Death of transferor or property transferred]  

Where, on a particular day, a person who has transferred to another person a right to receive income from property:

(a) in any case - transfers to the other person or to a third person an interest in the property, being the interest from the ownership of which by the transferor the right arose;

(b) in the case of a natural person - dies; or

(c) in the case of a company - ceases to exist,

subsection (1) (other than subparagraph (1)(b)(ii)) does not apply, in relation to the transfer of the right to receive income, in relation to income that is derived from the property after that day.

102B(4)   [Transfer for alimony or maintenance]  

Subsection (1) does not apply in relation to income derived by a person in pursuance of a transfer to that person of a right to receive income from property where, by reason of subsection 51-50(3) of the Income Tax Assessment Act 1997 , the income so derived by the person is not exempt from tax under section 51-30 of that Act.

102B(4A)   [Assessability of consideration for transfer]  

Where:

(a) subsection (1) (other than subparagraph (1)(b)(ii)) applies in relation to a transfer by a person of a right to receive income from property; and

(b) consideration has been received or is receivable in respect of the transfer,

then, notwithstanding any other provision of this Act (other than a provision of Part IVA), the amount of the consideration shall not be included in the assessable income of the person of a year of income.

102B(5)   [Amendment of assessments]  

Nothing in any other provision of this Act prevents the amendment of an assessment at any time for the purpose of excluding from the assessable income of a person income that is, by virtue of subsection (1), to be included in the assessable income of another person.

102B(6)   [Amendment of assessments]  

Where there is excluded from the assessable income of a person an amount that, in pursuance of subsection (1) was previously treated as assessable income of that person, nothing in any other provision of this Act prevents the amendment of any assessment at any time to give effect to the inclusion in the assessable income of another person of an amount that, in pursuance of that subsection, was treated as not being so included for the purposes of the assessment.