Income Tax Assessment Act 1936

PART III - LIABILITY TO TAXATION

Division 6D - Provisions relating to certain closely held trusts

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Subdivision B - Interpretation

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SECTION 102UE MEANING OF UNTAXED PART

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102UE(1) [ Untaxed part]

The untaxed part of a share of the net income of a closely held trust is so much of that share as is not covered by subsection (2).

102UE(2) [ Parts not untaxed]

The share of the net income of the closely held trust is covered by this subsection to the extent that:

(a) the trustee of the closely held trust is assessed and liable to pay tax under subsection 98(4) in respect of the share; or

(b) the share is reasonably attributable to a part of the net income of another trust estate in respect of which the trustee of the other trust estate is assessed and liable to pay tax under subsection 98(4) ; or

(c) the share is represented by or reasonably attributable to an amount from which an entity was required to withhold an amount under Subdivision 12-H in Schedule 1 to the Taxation Administration Act 1953 ; or

(d) the share is reasonably attributable to a part of the net income of another trust estate in respect of which the trustee of the other trust estate was liable to pay trustee beneficiary non-disclosure tax.

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History

S 102UE substituted for s 102UE and 102UF by No 143 of 2007 , s 3 and Sch 4 item 14, applicable to the first income year starting on or after 24 September 2007 and later income years. S 102UE formerly read:

SECTION 102UE ULTIMATE BENEFICIARY
102UE(1)
This section states when a person is an ultimate beneficiary in respect of the whole or part (the head trust amount ) of:

(a) a share of the net income of a closely held trust for a year of income that is included in the assessable income of a trustee beneficiary of the trust under section 97 ; or

(b) a share of a tax-preferred amount of a closely held trust to which a trustee beneficiary of the trust is presently entitled at the end of a year of income.

102UE(2) Present entitlement cases.
A person is an ultimate beneficiary in respect of the head trust amount if the person is a listed person and:

(a) is the trustee beneficiary; or

(b) is presently entitled to the head trust amount indirectly through one or more interposed partnerships or trusts (other than any that are ultimate beneficiaries).

102UE(3) No present entitlement.
A person is an ultimate beneficiary in respect of the head trust amount if:

(a) the person:

(i) is the trustee beneficiary; or

(ii) is the trustee of a trust who is presently entitled to the head trust amount indirectly through one or more interposed partnerships or trusts (other than any that are ultimate beneficiaries); and

(b) no beneficiary of the trust of which the person is trustee is presently entitled to the head trust amount indirectly as a beneficiary of that trust; and

(c) the person is not an ultimate beneficiary in respect of the head trust amount under subsection (4).
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History

S 102UE(3) amended by No 43 of 2000.

102UE(4) Full absorption of head trust amount.
If the head trust amount is the whole or part of a share of the net income of the closely held trust, a person is also an ultimate beneficiary in respect of the head trust amount if:

(a) the person is the trustee of another closely held trust (the lower level trust ); and

(b) the person:

(i) is the trustee beneficiary; or

(ii) is presently entitled to the head trust amount indirectly through one or more interposed partnerships or trusts (other than as ultimate beneficiaries); and

(c) the head trust amount is not greater than the amount worked out using the formula:
lower level trust deductions - lower level trust assessable income
where:

lower level trust assessable income means the assessable income (disregarding any amount attributable to the head trust amount) taken into account in working out the net income of the lower level trust for the year of income.

lower level trust deductions means allowable deductions taken into account in working out the net income of the lower level trust for the year of income.

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History

S 102UE(4) amended by No 43 of 2000. For application and transitional provisions, see the history note under s 102URA.

102UE(5) Exclusion of trustee of closely held trust.
The trustee of the closely held trust cannot, in the capacity of trustee of that trust, be an ultimate beneficiary of the head trust amount.

S 102UE inserted by No 70 of 1999.

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