Taxation Laws Amendment (Trust Loss and Other Deductions) Act 1998 (17 of 1998)

Schedule 1   Trust losses and other deductions

Part 1   Income Tax Assessment Act 1936

Division 3   Application and transitional provisions

22   Transitional - family trust elections

 

(1) Subject to this item and item 22A, a family trust election that is proposed to be made cannot specify a year of income under subsection 272-80(1) of the trust loss etc. Schedule that is before the 1997-98 year of income.

      

(2) If:

(a) a family trust election can be made in accordance with subsection 272-80(2) of the trust loss etc. Schedule specifying the 1998-99 year of income; and

(b) assuming that the family trust election could instead specify the 1996-97 year of income or the 1997-98 year of income (the qualifying year of income ):

(i) a company that would otherwise be prevented, by section 63B or 63C of the Income Tax Assessment Act 1936 from deducting in the qualifying year of income an amount in respect of a debt would not be so prevented; or

(ii) a company that would otherwise be prevented by subsection 160ZC(5) of the Income Tax Assessment Act 1936 from applying a net capital loss in the qualifying year of income would not be so prevented; or

(iii) a company that would otherwise be prevented by Subdivision 165-A, 175-A or 175-B of the Income Tax Assessment Act 1997 from deducting an amount in the qualifying year of income would not be so prevented; or

(iv) a company that would otherwise be required to calculate its taxable income for the qualifying year of income in accordance with section 50C of the Income Tax Assessment Act 1936 would not be so required; or

(v) a company that would otherwise not be entitled, in calculating its taxable income for the qualifying year of income in accordance with section 50C of the Income Tax Assessment Act 1936, to take into account an amount, by reason of subsection 50D(2), in ascertaining the eligible notional loss of the company under section 50D, would be so entitled; or

(vi) a company that would otherwise be required to calculate its taxable income and tax loss for the qualifying year of income under Subdivision 165-B of the Income Tax Assessment Act 1997 would not be so required; and

(c) the trust concerned passes the family control test (see section 272-87 of the trust loss etc. Schedule):

(i) if the qualifying year of income is the 1996-97 year of income - at all times from the beginning of that year of income until the end of the 1997-98 year of income; or

(ii) if the qualifying year of income is the 1997-98 year of income - at the end of the 1997-98 year of income; and

(d) the Taxation Laws Amendment Act (No. 2) 2000 receives the Royal Assent:

(i) if the trustee is required to furnish a return for the 1998-99 year of income - before the time when the trustee furnishes the return; or

(ii) if the trustee is not required to furnish a return for the 1998-99 year of income - before the end of 2 months after the end of that year of income;

the election can instead specify the qualifying year of income.

      

(2A) If:

(a) a family trust election can be made in accordance with subsection 272-80(2) of the trust loss etc. Schedule in relation to a non-fixed trust (within the meaning of section 272-70 of the trust loss etc. Schedule) specifying the 1998-99 year of income; and

(b) a franked dividend or a franked distribution (both within the meaning of section 177EA of the Income Tax Assessment Act 1936) was included in the assessable income of the trust of the 1997-98 year of income (the qualifying year of income ); and

(c) the trust passes the family control test at the end of the 1997-98 year of income; and

(d) the Taxation Laws Amendment Act (No. 2) 1999 and the Taxation Laws Amendment Act (No. 2) 2000 receive the Royal Assent:

(i) if the trustee is required to furnish a return for the 1998-99 year of income - before the time when the trustee furnishes the return; or

(ii) if the trustee is not required to furnish a return for the 1998-99 year of income - before the end of 2 months after the end of that year of income;

the election can instead specify the qualifying year of income.

      

(3) A family trust election specifying the qualifying year of income in accordance with subitem (2) or (2A) must:

(a) be in writing in a form and manner approved by the Commissioner; and

(b) be made:

(i) if the trustee is required to furnish a return for the 1998-99 year of income - by the time when the trustee furnishes the return; or

(ii) if the trustee is not required to furnish a return for the 1998-99 year of income - before the end of 2 months after the end of that year of income or before the end of such later day as the Commissioner allows.

      

(4) If a family trust election is made in accordance with subitem (3) specifying the qualifying year of income:

(a) if the trustee is required to furnish a return for the 1998-99 year of income - such information about the election as is required by the return must be included in the return; and

(b) if the trustee is not required to furnish a return for that year of income - the trustee must, before the end of 2 months after the end of the 1998-99 year of income or before the end of such later day as the Commissioner allows, give the Commissioner such information about the election as the Commissioner, by notice in the Gazette, requires.

      

(5) If:

(a) a family trust election does specify the qualifying year of income in accordance with this item; and

(b) the trust concerned is not prevented by the trust loss etc. Schedule from deducting a tax loss, or an amount in respect of a debt, and is not required to work out its net income and tax loss under Division 268 of that Schedule in:

(i) if the qualifying year is the 1996-97 year of income - that year of income, the 1997-98 year of income or both (the excluded period ); or

(ii) if the qualifying year mentioned in that subitem is the 1997-98 year of income - that year of income (also the excluded period );

no liability to pay family trust distribution tax arises under Division 271 of the trust loss etc. Schedule in respect of a conferral of a present entitlement to, or a distribution of, income or capital that took place in the excluded period.

      

(6) If the revocation of a family trust election is proposed to specify a time under subsection 272-80(8) that is before the beginning of the 1998-99 year of income, then:

(a) subsection 272-80(7) of the trust loss etc. Schedule does not apply to the revocation; and

(b) if the trustee is required to furnish a return for the 1998-99 year of income - the revocation must be made in the trust's return of income for that year of income; and

(c) if the trustee is not required to furnish a return for that year of income - the revocation must:

(i) be in writing in a form approved by the Commissioner; and

(ii) be given to the Commissioner by the end of 2 months after the end of that year of income or before the end of such later day as the Commissioner allows.