Tax Laws Amendment (2011 Measures No. 2) Act 2011 (41 of 2011)

Schedule 5  

Part 19   Nomination of controllers of discretionary trust

Income Tax Assessment Act 1997

102   After section 152-75

Insert:

Nomination of controllers of discretionary trust

152-78 Trustee of discretionary trust may nominate beneficiaries to be controllers of trust

(1) This section applies for the purposes of determining whether an entity is *connected with you, for the purposes of:

(a) this Subdivision; and

(b) sections 328-110, 328-115 and 328-125 so far as they relate to this Subdivision.

(2) The trustee of a discretionary trust may nominate not more than 4 beneficiaries as being controllers of the trust for an income year (the relevant income year ) for which the trustee did not make a distribution of income or capital if the trust had a *tax loss, or no *net income, for that year.

(3) A nomination under subsection (2) has effect as if each nominated beneficiary controlled the trust for the relevant income year in a way described in section 328-125.

Note: This means each nominated beneficiary is connected with the trust.

(4) A nomination under subsection (2) must:

(a) be in writing; and

(b) be signed by the trustee and by each nominated beneficiary.