Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS

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Division 115 - Discount capital gains and trusts ' net capital gains

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Subdivision 115-C - Rules about trusts with net capital gains

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Operative provisions

SECTION 115-215 Assessing presently entitled beneficiaries

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Purpose

115-215(1)
The purpose of this section is to ensure that appropriate amounts of the trust estate ' s net income attributable to the trust estate ' s *capital gains are treated as a beneficiary ' s capital gains when assessing the beneficiary, so:

(a) the beneficiary can apply *capital losses against gains; and

(b) the beneficiary can apply the appropriate *discount percentage (if any) to gains.

115-215(2)
(Repealed by No 62 of 2011)

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History

S 115-215(2) repealed by No 62 of 2011, s 3 and Sch 2 item 9, effective 29 June 2011. For application provisions see note under s 115-200 . S 115-215(2) formerly read:

Application

115-215(2)
This section treats you as having certain extra *capital gains, and gives you a deduction, if:

(a) you are the beneficiary of the trust estate; and

(b) your assessable income for the income year includes an amount (the trust amount ):

(i) under paragraph 97(1)(a) of the Income Tax Assessment Act 1936 ; or

(ii) under subsection 98A(1) or (3) of that Act; or

(iii) under section 100 of that Act.

(iv) (Repealed by No 32 of 2008 )

S 115-215(2) amended by No 32 of 2008 , s 3 and Sch 1 item 13, by substituting para (b)(iii) for para (b)(iii) and (iv), applicable to fund payments made in relation to the first income year starting on or after the first 1 July after 23 June 2008 and later income years. Para (b)(iii) and (iv) formerly read:

(iii) under section 100 of that Act; or

(iv) under section 99F of that Act.

S 115-215(2) amended by No 79 of 2007 , s 3 and Sch 10 item 10, by inserting para (b)(iv), applicable to the first income year starting on or after the first 1 July after the day on which No 79 of 2007 receives the Royal Assent (ie 21 June 2007) and later income years.

S 115-215(2) amended by No 79 of 2007 , s 3 and Sch 9 item 16, by substituting para (b)(ii) and (iii), applicable in relation to income years starting on or after 1 July 2006. Para (b)(ii) and (iii) formerly read:

(ii) under subsection 98A(1) of that Act because you are a beneficiary described in subsection 98(4) of that Act; or

(iii) under subsection 100(1) of that Act.

Extra capital gains

115-215(3)

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If you are a beneficiary of the trust estate, for each *capital gain of the trust estate, Division 102 applies to you as if you had:

(a) if the capital gain was not reduced under either step 3 of the method statement in subsection 102-5(1) (discount capital gains) or Subdivision 152-C (small business 50% reduction) - a capital gain equal to the amount mentioned in subsection 115-225(1) ; and

(b) if the capital gain was reduced under either step 3 of the method statement or Subdivision 152-C but not both (even if it was further reduced by the other small business concessions) - a capital gain equal to twice the amount mentioned in subsection 115-225(1) ; and

(c) if the capital gain was reduced under both step 3 of the method statement and Subdivision 152-C (even if it was further reduced by the other small business concessions) - a capital gain equal to 4 times the amount mentioned in subsection 115-225(1) .

Note:

This subsection does not affect the amount (if any) included in your assessable income under Division 6 of Part III of the Income Tax Assessment Act 1936 because of the capital gain of the trust estate. However, Division 6E of that Part may have the effect of reducing the amount included in your assessable income under Division 6 of that Part by an amount related to the capital gain you have under this subsection.

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115-215(4)
For each *capital gain of yours mentioned in paragraph (3)(b) or (c):

(a) if the relevant trust gain was reduced under step 3 of the method statement in subsection 102-5(1) - Division 102 also applies to you as if your capital gain were a *discount capital gain, if you are the kind of entity that can have a discount capital gain; and

(b) if the relevant trust gain was reduced under Subdivision 152-C - the capital gain remaining after you apply step 3 of the method statement is reduced by 50%.

Note:

This ensures that your share of the trust estate ' s net capital gain is taxed as if it were a capital gain you made (assuming you made the same choices about cost bases including indexation as the trustee).

115-215(4A)

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To avoid doubt, subsection (3) treats you as having a *capital gain for the purposes of Division 102 , despite section 102-20 .

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Section 118-20 does not reduce extra capital gains

115-215(5)
To avoid doubt, section 118-20 does not reduce a *capital gain that subsection (3) treats you as having for the purpose of applying Division 102 .

115-215(6)
(Repealed by No 62 of 2011)

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