Income Tax Assessment Act 1936

PART III - LIABILITY TO TAXATION  

Division 6AAA - Special provisions relating to non-resident trust estates etc.  

Subdivision D - Accruals system of taxation of certain non-resident trust estates  

SECTION 102AAZD   ASSESSABLE INCOME OF ATTRIBUTABLE TAXPAYER TO INCLUDE ATTRIBUTABLE INCOME OF TRUST ESTATE TO WHICH TAXPAYER HAS TRANSFERRED PROPERTY OR SERVICES  

102AAZD(1)   [Assessable income]  

Subject to section 102AAZE and to this section, if:

(a) an entity is an attributable taxpayer:

(i) in relation to the year of income of the taxpayer commencing on 1 July 1990 (which year of income is in this section called the taxpayer's current year of income ) or in relation to a subsequent year of income of the taxpayer (which year of income is in this section also called the taxpayer's current year of income ); and

(ii) in relation to a trust estate; and

(b) any part of a non-resident year of income of the trust estate occurs during the taxpayer's current year of income; and

(c) the taxpayer is a resident at any time during the taxpayer's current year of income;

the assessable income of the taxpayer of the taxpayer's current year of income includes:

(d) if the taxpayer is a resident at all times during the taxpayer's current year of income - the whole of the notional attributable income of the trust estate of the taxpayer's current year of income; or

(e) if the taxpayer is a resident for only part of the taxpayer's current year of income - the amount calculated using the formula:

Notional attributable income

×

Days in residency period   Days in year of income

where:

Notional attributable income means the notional attributable income of the trust estate of the taxpayer's current year of income.

Days in residency period means the number of whole days during the taxpayer's current year of income when the taxpayer was a resident.

Days in year of income means the number of whole days in the taxpayer's current year of income.

102AAZD(2)   [Notional attributable income]  

A reference in subsection (1) to the notional attributable income of the trust estate of the taxpayer's current year of income is a reference to:

(a) if there is a year of income of the trust estate that begins at the same time as the beginning of the taxpayer's current year of income - the attributable income of the trust estate of that year of income; or

(b) in any other case - the amount obtained:

(i) by calculating, for each year of income of the trust estate (in this paragraph called the trust's year of income ) any part of which occurs during the taxpayer's current year of income, the amount calculated using the formula:

Attributable income

×

Days in overlapping period     Days in trust's year of income

where:
Attributable income means the attributable income of the trust estate of the trust's year of income.
Days in overlapping period means the number of whole days in the trust's year of income that occurred during the taxpayer's current year of income.
Days in trust's year of income means the number of whole days in the trust's year of income; and

(ii) by adding together the amounts calculated under subparagraph (i).

102AAZD(3)   [Reduction of assessable income]  

If:

(a) an amount is included in the assessable income of an attributable taxpayer of the taxpayer's current year of income under subsection (1); and

(b) before or during the taxpayer's current year of income, one or more entities other than the taxpayer have transferred property or services to the trust estate concerned; and

(c) the taxpayer gives to the Commissioner, in accordance with the approved form, such information in connection with the operation of this Division as is required by the form to be set out;

the Commissioner may reduce the amount included in the taxpayer's assessable income of the taxpayer's current year of income under subsection (1) having regard to:

(d) the extent to which the attributable income of the trust estate is, in the opinion of the Commissioner, attributable to property or services transferred by the taxpayer; and

(e) such other matters as the Commissioner considers relevant.

102AAZD(4)   [No information to determine attributable income]  

If:

(a) apart from this subsection, an amount would be included in the assessable income of an attributable taxpayer of the taxpayer's current year of income under subsection (1) in relation to a particular trust estate; and

(b) the taxpayer could not reasonably be expected to obtain the information required to determine the attributable income of the trust estate;

the following provisions have effect:

(c) no amount is to be included in the assessable income of the taxpayer of the taxpayer's current year of income under subsection (1) in relation to the trust estate;

(d) the assessable income of the taxpayer of the taxpayer's current year of income includes the amount obtained:

(i) if any of the transfers that were taken into account in determining whether the taxpayer was an attributable taxpayer in relation to the taxpayer's current year of income and in relation to the trust estate were made by the taxpayer to the trust estate after the IP time - by calculating, for each such transfer, the amount calculated using the formula:

where:
Adjusted value of the transfer has the meaning given by subsection (5).
Weighted statutory interest rate means the weighted statutory interest rate in relation to the taxpayer's current year of income; and

(ii) if any of the transfers that were taken into account in determining whether the taxpayer was an attributable taxpayer in relation to the taxpayer's current year of income and in relation to the trust estate were made by the taxpayer to the trust estate before the IP time - the amount calculated using the formula:

where:
Adjusted net worth of trust estate has the meaning given by subsection (6);
Weighted statutory interest rate means the weighted statutory interest rate in relation to the taxpayer's current year of income; and

(iii) by adding together the amounts calculated under subparagraphs (i) and (ii).

102AAZD(5)   [Adjusted value of transfer]  

For the purposes of subsection (4), the adjusted value of a transfer of property or services made by an attributable taxpayer to a trust estate is:

(a) if the transfer occurred during the taxpayer's current year of income - the amount calculated using the formula:

Market value of transferred property or services

×

Days after transfer     Days in year of income

where:

Market value of transferred property or services means the market value, immediately before the transfer, of the property or services.

Days after transfer means the number of whole days in the taxpayer's current year of income after the day on which the transfer took place.

Days in year of income means the number of whole days in the taxpayer's current year of income; or

(b) if the transfer of the property or services occurred before the taxpayer's current year of income - the sum of:

(i) the market value, immediately before the transfer, of the property or services; and

(ii) the amount obtained:

(A) by calculating, in respect of the transfer, for each year of income preceding the taxpayer's current year of income, the amount ascertained using the formula in subparagraph (4)(d)(i); and

(B) by adding together the amounts calculated under sub-subparagraph (A).

102AAZD(6)   [Adjusted net worth of trust estate]  

For the purposes of the application of subsection (4) in relation to a transfer of property or services made by an attributable taxpayer to a trust estate, the adjusted net worth of the trust estate is:

(a) if the taxpayer's current year of income is the year of income commencing on 1 July 1990 - the 1 July 1990 net worth of the trust estate; or

(b) in any other case - the sum of:

(i) the 1 July 1990 net worth of the trust estate; and

(ii) the amount obtained:

(A) by calculating, in respect of the transfer, for each year of income preceding the taxpayer's current year of income, the amount ascertained using the formula in subparagraph (4)(d)(ii); and

(B) by adding together the amounts calculated under sub-subparagraph (A).

102AAZD(7)   [Transfer made on or before 12/4/89]  

If:

(a) subsection (4) applies to an attributable taxpayer in relation to the taxpayer's current year of income; and

(b) any of the transfers taken into account in determining whether the taxpayer was an attributable taxpayer in relation to the taxpayer's year of income and in relation to the trust estate concerned were made before the IP time; and

(c) the taxpayer gives to the Commissioner, in accordance with the approved form, such information in connection with the operation of this Division as is required by the form to be set out;

the Commissioner may reduce the amount included in the taxpayer's assessable income of the taxpayer's current year of income under subsection (4) having regard to:

(d) the extent to which the market value, as at the beginning of the taxpayer's current year of income, of the assets of the trust estate is, in the opinion of the Commissioner, attributable to property or services transferred by the taxpayer before the IP time; and

(e) such other matters as the Commissioner considers relevant.