Income Tax Assessment Act 1936

PART X - ATTRIBUTION OF INCOME IN RESPECT OF CONTROLLED FOREIGN COMPANIES  

Division 2 - Types of entity  

Subdivision C - Eligible transferors in relation to trusts  

SECTION 347   ELIGIBLE TRANSFEROR IN RELATION TO A DISCRETIONARY TRUST  

347(1)   [Circumstances to qualify as eligible transferor]  

An entity (in this section called the ``transferor entity'' ) is an eligible transferor in relation to a discretionary trust at a particular time (in this section called the ``test time'' ) if the trust is not a public unit trust at the test time and:

(a) all of the following subparagraphs apply:

(i) the transferor entity transferred property or services to the trust at a time (in this subparagraph called the ``transfer time'' ) at or after the IP time and before the test time;

(ii) if the underlying transfer was made in the course of carrying on a business - the underlying transfer was not an eligible business transaction;

(iii) if the underlying transfer was made under an arm's length transaction otherwise than in the course of carrying on a business - the transferor entity was in a position, at any time after the transfer time and before the test time, to control the trust; or

(b) all of the following subparagraphs apply:

(i) the transferor entity transferred property or services to the trust at any time before the IP time;

(ii) the underlying transfer was not an eligible business transaction;

(iii) at any time after the IP time and before the test time, the entity was in a position to control the trust;

and, at the test time, the transferor entity is an Australian entity or a CFE.

347(2)   [Entity in position to control trust]  

For the purposes of this section, an entity is taken to be in a position to control a trust if, and only if:

(a) a group in relation to the entity had the power by means of the exercise by the group of any power of appointment or revocation or otherwise, to obtain, with or without the consent of any other entity, the beneficial enjoyment of the corpus or income of the trust; or

(b) a group in relation to the entity was able in any manner whatsoever, whether directly or indirectly, to control the application of the corpus or income of the trust; or

(c) a group in relation to the entity was capable under a scheme of gaining the enjoyment or the control referred to in paragraph (a) or (b); or

(d) a trustee of the trust was accustomed or under an obligation (whether formally or informally) or might reasonably be expected to act in accordance with the directions, instructions or wishes of a group in relation to the entity; or

(e) a group in relation to the entity was able to remove or appoint the trustee, or any of the trustees, of the trust.

347(3)   [Reference to group in relation to entity]  

A reference in subsection (2) to a group in relation to an entity is a reference to any of the following:

(a) the entity acting alone;

(b) an associate of the entity acting alone;

(c) the entity and one or more associates of the entity acting together;

(d) 2 or more associates of the entity acting together.