{"id":"C2004A03042","name":"Trust Recoupment Tax Act 1985","slug":"trust-recoupment-tax-act-1985","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"3 of 1985","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":34657,"registerId":"commonwealth-C2004A03042-current","compilationNumber":null,"startDate":"2026-04-01","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Short title","content":"#### 1 Short title\n\n  This Act may be cited as the Trust Recoupment Tax Act 1985.","sortOrder":0},{"sectionNumber":"2","sectionType":"section","heading":"Commencement","content":"#### 2 Commencement\n\n  This Act shall come into operation on the day on which the Trust Recoupment Tax Assessment Act 1985 comes into operation.","sortOrder":1},{"sectionNumber":"3","sectionType":"section","heading":"Incorporation","content":"#### 3 Incorporation\n\n  The Trust Recoupment Tax Assessment Act 1985 is incorporated and shall be read as one with this Act.","sortOrder":2},{"sectionNumber":"4","sectionType":"section","heading":"Imposition of tax","content":"#### 4 Imposition of tax\n\n  Where a taxable amount exists under the Trust Recoupment Tax Assessment Act 1985, tax is imposed and shall be levied and paid on that taxable amount.","sortOrder":3},{"sectionNumber":"5","sectionType":"section","heading":"Rates of tax","content":"#### 5 Rates of tax\n\n  The rate of tax imposed by this Act on a taxable amount is:\n    (a) in the case of a primary taxable amount or a secondary taxable amount—45%;\n    (b) in the case of an elected taxable amount—75%; and\n    (c) in the case of a company taxable amount—46%.","sortOrder":4},{"sectionNumber":"6","sectionType":"section","heading":"Temporary budget repair levy","content":"#### 6 Temporary budget repair levy\n\n  (1) This section applies to the temporary budget repair levy years.\n  (2) Increase the rate of tax mentioned in paragraph 5(a) by 2 percentage points.\n  (3) In this section:\n\n> temporary budget repair levy year means a year of income corresponding to a temporary budget repair levy year (within the meaning of section 4‑11 of the Income Tax (Transitional Provisions) Act 1997).","sortOrder":5}],"analysis":{"summary":{"complexity_score":4,"scope_assessment":{"changed":false,"description":"The Act appears to remain consistent with its original purpose — imposing penalty tax rates on trust recoupment arrangements. The addition of the temporary budget repair levy (section 6) was a minor, time-limited adjustment to rates rather than a change in the fundamental scope or intent of the legislation."},"complexity_factors":["The Act is a 'shell' charging Act that only makes sense when read together with the Trust Recoupment Tax Assessment Act 1985 — you need to consult multiple pieces of legislation to understand it fully","Technical distinctions between 'primary taxable amount', 'secondary taxable amount', 'elected taxable amount', and 'company taxable amount' are defined elsewhere, adding a cross-referencing burden","The temporary budget repair levy provision requires cross-referencing a third piece of legislation (Income Tax (Transitional Provisions) Act 1997) to determine which income years are affected","The underlying trust recoupment scheme rules are themselves complex, though not detailed in this Act"],"plain_english_summary":"The Trust Recoupment Tax Act 1985 imposes a special penalty tax on trust arrangements the ATO, under the companion Assessment Act, has found were used to improperly reduce or avoid income tax. It doesn’t decide liability but sets the punitive tax rates: primary/secondary amounts at 45% (47% during the temporary budget repair levy years), elected amounts at 75%, and company amounts at 46%.\n\nIt matters because those identified under the Assessment Act face very high tax rates intended to deter abusive trust use."},"kimi_summary":{"content_quality":"ok","complexity_score":3,"scope_assessment":{"changed":true,"description":"The original 1985 Act was a simple imposition statute with just sections 1-5. Section 6 (Temporary budget repair levy) was added later as part of the 2014-15 budget measures, expanding the Act's scope to include temporary rate increases for specific years. This represents scope creep from a permanent rate-setting statute to one that also handles temporary surcharges."},"complexity_factors":["Only 6 sections total, with minimal text","No defined terms in the main body (only one definition in section 6)","Heavy reliance on external legislation (Trust Recoupment Tax Assessment Act 1985) for operative provisions - the actual tax liability rules are not in this Act","Cross-reference to Income Tax (Transitional Provisions) Act 1997 for definition of 'temporary budget repair levy year'","Simple conditional logic (if taxable amount exists → tax imposed)","Straightforward rate structure with only three categories"],"plain_english_summary":"This law creates a special tax called the 'Trust Recoupment Tax' that applies in specific situations involving trusts. It works together with a partner law (the Trust Recoupment Tax Assessment Act 1985) to charge tax on certain amounts that trusts have received.\n\n**What it does:**\n- **Imposes the tax**: If the Assessment Act says a 'taxable amount' exists, this law makes the tax legally payable.\n- **Sets the tax rates**:\n  - **45%** for most situations (called 'primary' or 'secondary' taxable amounts)\n  - **75%** for 'elected taxable amounts' (a higher rate that applies when someone chooses a particular tax treatment)\n  - **46%** when the amount relates to a company\n- **Adds a temporary extra charge**: During 'temporary budget repair levy years' (a specific period when the government was trying to fix the budget), the 45% rate goes up by 2 percentage points to **47%**.\n\n**Who it affects:**\n- Trustees and beneficiaries of trusts who have received certain distributions or benefits that fall under the Assessment Act's rules.\n\n**Why it matters:**\nThis is a 'penalty' style tax designed to recoup (claw back) tax benefits that were improperly obtained through trust arrangements. The high rates (up to 75%) show it's meant to be a strong deterrent against tax avoidance using trusts. The law itself is quite short because all the detailed rules about *when* the tax applies are in the separate Assessment Act."},"flash_summary":{"complexity_score":4,"scope_assessment":{"changed":false,"description":"The text sets out imposition, rates and a temporary levy mechanism without indicating any alteration to its original scope. The Act incorporates the Trust Recoupment Tax Assessment Act 1985 (s 3) and relies on that Act and the Income Tax (Transitional Provisions) Act 1997 for definitions and years (ss 3, 6(3)); nothing in this text shows a change from those stated powers or coverage."},"complexity_factors":["Heavy cross‑reference to the Trust Recoupment Tax Assessment Act 1985: taxable amounts are defined and assessed in that separate Act; this Act imposes the tax (ss 3–4).","Multiple distinct rate categories require classification of the taxable amount as primary, secondary, elected or company (s 5).","Temporary budget repair levy increases the base rate by 2 percentage points only for years defined by a provision in a different statute (Income Tax (Transitional Provisions) Act 1997 s 4‑11), creating inter‑statute dependency (s 6(2)–(3)).","Short, mechanically framed provisions leave substantive definitions, assessment mechanics and compliance procedures to the incorporated Assessment Act, increasing the need to consult multiple instruments for full compliance (s 3).","Administrative and compliance burden concentrates on taxpayers/agents who must map trust events to the Assessment Act’s definitions to determine which rate applies (ss 4–5)."],"plain_english_summary":"This Act imposes a tax on trust recoupment amounts identified by the companion Trust Recoupment Tax Assessment Act 1985, specifying who must pay and at what percentage. It sets distinct rates for primary/secondary, elected and company taxable amounts (45%, 75%, 46%) and allows a temporary 2 percentage‑point increase for certain years, so trustees, beneficiaries and companies know the tax liability when trust amounts are recouped."}},"importantCases":[],"_links":{"self":"/api/acts/trust-recoupment-tax-act-1985","history":"/api/acts/trust-recoupment-tax-act-1985/history","analysis":"/api/acts/trust-recoupment-tax-act-1985/analysis","conflicts":"/api/acts/trust-recoupment-tax-act-1985/conflicts","importantCases":"/api/acts/trust-recoupment-tax-act-1985/important-cases","documents":"/api/acts/trust-recoupment-tax-act-1985/documents"}}