Income Tax Assessment Act 1936
Conditions for tax liability
271-60(1)
If:
(a) tax under section 271-15 on the amount or value of income or capital of a family trust becomes due and payable; and
(b) the Commissioner determines, in writing, at or after the time when the tax became due and payable, that it is unlikely that the whole or part (the unpaid amount ) of the tax will be paid; and
(c) when the Commissioner makes the determination:
(i) a trustee of the family trust is a non-resident; or
(ii) the central management and control of the family trust is outside Australia.
then the consequences set out in subsection (2) result.
Tax liability
271-60(2)
The consequences are:
(a) if there is only one person covered by subsection (3) - that person is liable to pay tax, as imposed by the Family Trust Distribution Tax (Secondary Liability) Act 1998 , on the unpaid amount; and
(b) if there are 2 or more persons covered by subsection (3) - those persons are jointly and severally liable to pay tax, as imposed by the Family Trust Distribution Tax (Secondary Liability) Act 1998 , on the unpaid amount.
Persons liable under subsection (2)
271-60(3)
The persons covered by this subsection are:
(a) the trustee of any trust to which subsection (4) applies; and
(b) if the trustee of any such trust is a company - any person who is a director of the company when the determination is made; and
(c) any company to which subsection (5) applies; and
(d) any person who is a director of such a company when the determination is made.
Trust mentioned in paragraph (3)(a)
271-60(4)
This subsection applies to a trust if the trust would be:
(a) prevented by Division 266 or 267 from deducting a tax loss or amount in respect of a debt; or
(b) required by Division 266 or 267 to work out its net income and tax loss under Division 268 ;
in the income year in which the determination is made, or an earlier income year, if the family trust had not been a family trust.
Company mentioned in paragraph (3)(c)
271-60(5)
This subsection applies to a company if, in its return of income for the income year in which the determination is made or an earlier income year:
(a) the company deducted an amount in respect of a debt, where it was allowed to do so but, because of former section 63B or 63C , or Subdivision 165-C , 709-D or 719-I of the Income Tax Assessment Act 1997 , it would not have been if the family trust had not been a family trust; or
(b) the company deducted a tax loss (within the meaning of the Income Tax Assessment Act 1997 ) where it was allowed to do so but, because of Subdivision 165-A of that Act, it would not have been if the family trust had not been a family trust; or
(c) the company applied a net capital loss (within the meaning of former Part IIIA of this Act) where it was allowed to do so but, because of former subsection 160ZC(5), it would not have been if the family trust had not been a family trust; or
(d) the company applied a net capital loss (within the meaning of the Income Tax Assessment Act 1997 ) where it was allowed to do so but, because of Subdivision 165-CA of that Act, it would not have been if the family trust had not been a family trust;
(e) the company did not calculate its taxable income in accordance with former section 50C of this Act where it was not required to do so but would have been if the family trust had not been a family trust; or
(f) the company calculated its taxable income in accordance with former section 50C and took into account an amount, by reason of former subsection 50D(2), in ascertaining the eligible notional loss of the company under former section 50D, where it was required to calculate its taxable income in accordance with former section 50C and entitled to take the amount into account but would not have been so entitled if the family trust had not been a family trust; or
(g) the company did not calculate its taxable income and tax loss under Subdivision 165-B of the Income Tax Assessment Act 1997 where it was not required to do so but would have been if the family trust had not been a family trust; or
(h) the company did not calculate its net capital gain and net capital loss under Subdivision 165-CB of the Income Tax Assessment Act 1997 where it was not required to do so but would have been if the family trust had not been a family trust.
Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited
CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.
The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.