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 115-220 Assessing trustees under section 98 of the Income Tax Assessment Act 1936

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115-220(1)

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This section applies if:

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

(b) on the assumption that there is a share of the income of the trust to which a beneficiary of the trust is presently entitled, you would be liable to be assessed (and pay tax) under section 98 of the Income Tax Assessment Act 1936 in relation to the trust estate in respect of the beneficiary.

115-220(2)

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For each *capital gain of the trust estate, increase the amount (the assessable amount ) in respect of which you are actually liable to be assessed (and pay tax) under section 98 of the Income Tax Assessment Act 1936 in relation to the trust estate in respect of the beneficiary by:

(a) unless paragraph (b) applies - the amount mentioned in subsection 115-225(1) in relation to the beneficiary; or

(b) if the liability is under paragraph 98(3)(b) or subsection 98(4) , and the capital gain was reduced under step 3 of the method statement in subsection 102-5(1) (discount capital gains) - twice the amount mentioned in subsection 115-225(1) in relation to the beneficiary.

115-220(3)
To avoid doubt, increase the assessable amount under subsection (2) even if the assessable amount is nil.

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History

S 115-220 substituted by No 62 of 2011, s 3 and Sch 2 item 11, effective 29 June 2011. For application provisions see note under s 115-200 . S 115-220 formerly read:

SECTION 115-220 Special rule for assessing trustee under paragraph 98(3)(b) of the Income Tax Assessment Act 1936
Purpose

115-220(1)
The purpose of this section is to ensure a trustee assessed under paragraph 98(3)(b) of the Income Tax Assessment Act 1936 (in respect of the share of the net income to which a beneficiary that is a company is entitled) does not get the benefit in that assessment of the *discount percentage that the company would not have got if it had been assessed in respect of the share.
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History

S 115-220(1) amended by No 79 of 2007 , s 3 and Sch 9 item 18, by substituting " paragraph 98(3)(b) " for " subsection 98(3) " , applicable in relation to income years starting on or after 1 July 2006.

Modification of paragraph 98(3)(b)

115-220(2)
The trustee is to be assessed (and pay tax) under paragraph 98(3)(b) of the Income Tax Assessment Act 1936 as if the part of the share that is attributable to a *capital gain of the trust estate that was reduced under step 3 of the method statement in subsection 102-5(1) were double the amount that it actually is.
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History

S 115-220(2) amended by No 79 of 2007 , s 3 and Sch 9 items 19 and 20, by substituting " paragraph 98(3)(b) " for " subsection 98(3) " , applicable in relation to income years starting on or after 1 July 2006.

S 115-220 substituted by No 165 of 1999 and inserted by No 169 of 1999.

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