INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART VII - PENALTY TAX  

SECTION 226S   SHORTFALL BECAUSE OF UNARGUABLE POSITION OF TRUSTEE  

226S(1)   [Trustee's tax shortfall]  

If:

(a) a trustee of a trust estate makes an estate taxation statement; and

(b) that statement treated an income tax law as applying in relation to a matter or identical matters in a particular way; and

(c) a taxpayer who is or has been a beneficiary of the estate has an estate shortfall excess for a year in relation to the statement; and

(d) the net income of the estate for a year would have been reduced, or a loss of the estate for that year would have been increased, because of the treatment by an amount that exceeds whichever is the higher of:

(i) $20,000; or

(ii) 2% of the net income of the estate (if any) calculated on the basis of the estate's return for that year; and

(e) when the statement was made, it was not reasonably arguable that the way in which the application of the law was treated was correct;

then the excess is a tax shortfall of the trustee for that year to which section 226K applies.

226S(2)   [Taxpayer in capacity of trustee]  

Subsection (1) does not mean that a reference in this Part to a taxpayer does not include a reference to a taxpayer in the capacity of a trustee.