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

Schedule 9   Non-resident trustee beneficiaries

Income Tax Assessment Act 1997

21   After section 115-220

Insert:

115-222 Special rule for assessing trustee under subsection 98(4) of the Income Tax Assessment Act 1936

Purpose

(1) The purpose of this section is to ensure a trustee assessed under subsection 98(4) of the Income Tax Assessment Act 1936 (in respect of the share of the net income to which a beneficiary that is a foreign resident in the capacity of a trustee is entitled) does not get the benefit in that assessment of the *discount percentage.

Modification of subsection 98(4)

(2) The trustee is to be assessed (and pay tax) under subsection 98(4) of the Income Tax Assessment Act 1936 as if the part of the share that is attributable to a *capital gain of the trust that was reduced under step 3 of the method statement in subsection 102-5(1) were double the amount that it actually is.