Tax Laws Amendment (2007 Measures No. 3) Act 2007 (79 of 2007)

Schedule 10   Distributions to foreign residents from managed investment trusts

Part 2   Consequential amendments

Income Tax Assessment Act 1936

6   Before section 100

Insert:

99F Assessable income includes amounts attributable to fund payments

If a beneficiary of a trust estate who is presently entitled to a share of the income of the trust estate:

(a) is a non-resident at the end of the year of income; and

(b) is not, in respect of that share, a beneficiary in the capacity of a trustee of another trust estate;

the assessable income of the beneficiary includes so much of the individual interest of the beneficiary in the net income of the trust estate as is represented by or reasonably attributable to an amount from which an entity is required to withhold an amount under Subdivision 12-H in Schedule 1 to the Taxation Administration Act 1953.

99G Payments covered by withholding requirement

(1) Sections 98, 99 and 99A do not apply to so much of the net income of a trust estate of a year of income as:

(a) represents income to which a beneficiary is presently entitled; and

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

(2) Subsection 98(4) does not apply to so much of the net income of a trust estate as represents income to which a beneficiary is presently entitled and gives rise to an amount from which an entity is required to withhold an amount under that Subdivision.

99H Late payments

(1) This section applies if:

(a) a beneficiary of a trust estate that is a managed investment trust is presently entitled to a share of the income of the trust estate of a year of income; and

(b) the beneficiary is a non-resident at the end of the year of income; and

(c) all or part of that share of the net income of the trust estate (the late amount ) has not been paid to the beneficiary by the end of the period applicable under subsection 12-400(4) in Schedule 1 to the Taxation Administration Act 1953; and

Note: That subsection requires payments to be made before the end of 3 months after the end of the relevant year of income or within a longer period allowed by the Commissioner.

(d) if the late amount had been paid to the beneficiary within that period, the payment would have been a fund payment made by the trustee of the managed investment trust.

(2) This Division applies as if that portion of the beneficiary’s income that represents the late amount were income to which no beneficiary was presently entitled.

(3) In working out the net income of the trust estate for the year of income for the purposes of subsection (1), disregard these amounts ( excluded amounts ):

(a) a dividend (as defined in Division 11A of Part III) that is subject to, or exempted from, a requirement to withhold under Subdivision 12-F in Schedule 1 to the Taxation Administration Act 1953;

(b) interest (as so defined) that is subject to, or exempted from, such a requirement;

(c) a royalty that is subject to, or exempted from, such a requirement;

(d) a capital gain from a CGT asset that is not taxable Australian property;

(e) amounts that are not from a source in Australia;

and disregard deductions relating to excluded amounts.