A New Tax System (Goods and Services Tax) Regulations 2019

Chapter 4 - The special rules  

Part 4-1 - Special rules mainly about particular ways entities are organised  

Division 48 - GST groups  

Subdivision 48-A - Formation and membership of GST groups  

SECTION 48-10.03   Membership requirements for trusts  

(1)    
For the purposes of subparagraph 48-10(1)(a)(ii) of the Act, the following are the requirements that a trust must satisfy:

(a) if the GST group or proposed GST group consists only of fixed trusts - either the requirement set out in subsection (2) or the alternative requirements set out in section 48-10.03A ;

(b) in any other case - the requirement set out in subsection (2).

Note:

The trust must also satisfy other membership requirements set out in section 48-10 of the Act.

Requirements that may be satisfied

(2)    
One of the following must be satisfied for the trustee of the trust (the candidate trustee ):

(a) the candidate trustee has at least a 90% stake in a company that is a member of the GST group or proposed GST group (worked out in accordance with section 190-5 of the Act as if the trustee were a company);

(b) the candidate trustee distributes any income or capital of the trust only to beneficiaries that are permitted beneficiaries (whether or not other distributions could lawfully be made);

(c) the candidate trustee is the sole beneficiary of any distribution of income or capital by the trustee of another trust that is a member of the GST group or proposed GST group;

(d) the candidate trustee distributes income or capital of the trust, and the trustee of another trust that is a member of the GST group or proposed GST group distributes income or capital of the other trust, only to persons who are all family members of the same individual (whether or not other distributions could lawfully be made).

Note:

Distributions to beneficiaries may be direct or indirect (section 48-10.01 ).

(3)    
Each of the following is a permitted beneficiary :

(a) a company that is a member of the GST group or proposed GST group;

(b) an endorsed charity or a gift-deductible entity;

(c) an individual who is a member of the GST group or proposed GST group;

(d) a family member of an individual who is a member of the GST group or proposed GST group;

(e) a trustee of a trust that is a member of the GST group or proposed GST group.

(4)    
For a company that is a member of the GST group or proposed GST group, each associated person in relation to a shareholder of the company is also a permitted beneficiary if:

(a) for a company with one shareholder - the beneficiaries of the trust include an associated person in relation to the shareholder; and

(b) for a company with more than one shareholder - the beneficiaries of the trust include at least 2 beneficiaries who are associated persons in relation to different shareholders.

(5)    
For a partnership that is a member of the GST group or proposed GST group, each associated person in relation to a partner in the partnership is also a permitted beneficiary if the beneficiaries of the trust include at least 2 beneficiaries who are associated persons in relation to different partners.