Tax Laws Amendment (2007 Measures No. 4) Act 2007 (143 of 2007)

Schedule 8   Family trusts

Income Tax Assessment Act 1936

2   Subsection 272-80(5) in Schedule 2F

Repeal the subsection, substitute:

Election generally cannot be varied or revoked

(5) Subject to subsections (5A), (5B), (5C), (6) and (6A), the election cannot be varied or revoked.

Variation cases

(5A) The trustee of a trust may, in respect of an income year during the period specified in subsection (6B), vary an election so that a different individual (the new individual ) is specified for the purposes of subsection (3) as the individual whose family group is to be taken into account in relation to the election if:

(a) the new individual was a member of the family of the individual originally specified in the election at the election commencement time; and

(b) any conferrals of present entitlement to income or capital of:

(i) the trust; and

(ii) an entity for which an interposed entity election has been made in relation to the trust;

during the period in which the election has been in force have been made on the new individual or on persons who would have been members of the new individual's family group at the time of the conferral; and

(c) any distributions of income or capital of:

(i) the trust; and

(ii) an entity for which an interposed entity election has been made in relation to the trust;

during the period in which the election has been in force have been made to the new individual or to persons who would have been members of the new individual's family group at the time of the distribution.

(5B) A variation of an election under subsection (5A) in relation to a trust can only be made once.

(5C) The trustee of a trust may vary an election so that a different individual (the new individual ) is specified for the purposes of subsection (3) as the individual whose family group is to be taken into account in relation to the election if:

(a) an order; or

(b) an agreement; or

(c) an award;

of a kind mentioned in paragraphs 126-5(1)(a) to (f) of the Income Tax Assessment Act 1997 results in the new individual, or a group comprising the new individual and members of the new individual's family, having control of the trust under subsection (5D).

(5D) The new individual, or a group comprising the new individual and members of the new individual's family, have control of the trust for the purposes of subsection (5C) if any of paragraphs 272-87(2)(a) to (g) are satisfied in relation to a group consisting of:

(a) the new individual; or

(b) the new individual and members of the new individual's family.