(10) A reference in subsection (7) to the payment of money to a person or persons shall be read as including a reference to the payment of money to a person or persons by way of loan.
(11) A reference in this section to a person shall be read as including a reference to a person in the capacity of a trustee.
(12) For the purposes of this section, an agreement that provides for a person to release, abandon, fail to demand payment of or postpone payment of, a debt owed by another person shall be deemed to be an agreement that provides for the payment of money to that other person.
(13) In this section:
agreement means any agreement, arrangement or understanding, whether formal or informal, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings, but does not include an agreement, arrangement or understanding entered into in the course of ordinary family or commercial dealing.
Note: Section 960‑255 of the Income Tax Assessment Act 1997 may be relevant to determining family relationships for the purposes of the definition of agreement.
property includes a chose in action and also includes an estate, interest, right or power, whether at law or in equity, in or over property.
101 Discretionary trusts
For the purposes of this Act, where a trustee has a discretion to pay or apply income of a trust estate to or for the benefit of specified beneficiaries, a beneficiary in whose favour the trustee exercises the trustee’s discretion shall be deemed to be presently entitled to the amount paid to the beneficiary or applied for the beneficiary’s benefit by the trustee in the exercise of that discretion.
101A Income of deceased received after death
(1) Where in the year of income, the trustee of the estate of a deceased person receives any amount which would have been assessable income in the hands of the deceased person if it had been received by him or her during his or her lifetime, that amount shall be included in the assessable income of that year of the trust estate and shall be deemed to be income to which no beneficiary is presently entitled.
(2) Subsection (1) does not apply in relation to an amount received by the trustee of the estate of a deceased person to the extent to which, if it had been received by the deceased person during his or her lifetime, it would have been included in the assessable income of that person by virtue of section 83‑10 or 83‑80 of the Income Tax Assessment Act 1997.
(3) To avoid doubt, if in the year of income an amount is included in the assessable income of a deceased taxpayer under Division 82 or 302 of the Income Tax Assessment Act 1997 in respect of a payment received by the trustee of the estate of the deceased taxpayer, that amount shall be included in the assessable income of that year of income of the trust estate.
(4) This section does not apply in relation to any amount received by the trustee of the estate of a deceased person if the amount is a farm management deposit, of which the deceased person was the owner, that has become repayable.
102 Revocable trusts
(1) Where a person has created a trust in respect of any income or property (including money) and:
(a) the person has power, whenever exercisable, to revoke or alter the trusts so as to acquire a beneficial interest in the income derived by the trustee during the year of income, or the property producing that income, or any part of that income or property; or
(b) income is, under that trust, in the year of income, payable to or accumulated for, or applicable for the benefit of a child or children of that person who is or are under the age of 18 years;
the Commissioner may assess the trustee to pay income tax, under this section, and the trustee shall be liable to pay the tax so assessed.
(2) The amount of the tax payable in pursuance of this section shall be the amount by which the tax actually payable on the person’s own taxable income by the person who created the trust is less than the tax which would have been payable by the person if he or she had received, in addition to any other income derived by the person, so much of the net income of the trust estate as:
(a) is attributable to the property in which he or she has power to acquire the beneficial interest;
(b) represents the income, or the part of the income, in which he or she has power to acquire the beneficial interest; or
(c) is payable to or accumulated for, or applicable for the benefit of, a child or children of that person who is or are under the age of 18 years.
(2A) Where any property the subject of a trust has been converted into other property, this section shall apply in the same way as if the trust had originally been created in respect of that other property.
(2B) In the application of subsection (2) in determining the amount of tax that is payable by a trustee of a trust estate in pursuance of this section, the reference in that subsection to the net income of the trust estate shall be read as a reference to that net income reduced by:
(a) so much (if any) of that net income as is attributable to a period when the person who created the trust was not a resident and is also attributable to sources out of Australia; and
(b) so much (if any) of that net income as is not covered by paragraph (a) and represents an amount included in the assessable income of any taxpayer under section 102AAZD.
(3) Where this section is applied to the assessment of the income of a trust estate or part thereof derived in the year of income, no beneficiary shall be assessed in his or her individual capacity in respect of his or her individual interest in the income or part to which this section has been so applied, and the trustee shall not be assessed in respect of that income or part otherwise than under this section.
Division 6AAA—Special provisions relating to non‑resident trust estates etc.
Subdivision A—Preliminary
102AAA Object of Division
The object of this Division is to set out rules relating to the following:
(a) the payment of interest on distributions from certain non‑resident trust estates (Subdivision B);
(b) the winding‑up of certain non‑resident trust estates in existence on 12 April 1989 (Subdivision C);
(c) an accruals system of taxation of certain non‑resident trust estates (Subdivision D).
102AAB Interpretation
In this Division, unless the contrary intention appears:
1 July 1990 net worth, in relation to a trust estate, means the market value, as at the beginning of 1 July 1990, of the assets of the trust estate, reduced by the liabilities of the trust estate as at the beginning of that day.
accounts has the same meaning as in Part X.
actual transfer, in relation to property or services, means a transfer of the property or services other than a transfer that is taken to have been made because of subsection 102AAK(1), (2), (5), (6), (8), (10) or (11).
arm’s length amount, in relation to an actual transfer of property or services to a trust estate, means the amount that the trustee could reasonably be expected to have been required to pay to obtain the property or the services concerned from the transferor under a transaction where the parties to the transaction are dealing with each other at arm’s length in relation to the transaction.
associate has the same meaning as in Part X.
attributable income, in relation to a trust estate, has the meaning given by section 102AAU.
attributable taxpayer has the meaning given by section 102AAT.
attribution account payment has the same meaning as in Part X.
attribution debit has the same meaning as in Part X.
Australian entity has the same meaning as in Part X.
Australian trust has the same meaning as in Part X.
base interest rate for a day has the same meaning as in section 8AAD of the Taxation Administration Act 1953.
CFC has the same meaning as in Part X.
controlled foreign trust has the same meaning as in Part X.
de facto relationship means:
(a) a relationship between 2 persons (whether of the same sex or different sexes) that is registered under a law of a State or Territory prescribed for the purposes of section 2E of the Acts Interpretation Act 1901 as a kind of relationship prescribed for the purposes of that section; or
(b) a relationship between 2 persons (whether of the same sex or different sexes) who, although not legally married to each other, live with each other on a genuine domestic basis in a relationship as a couple.
depreciation provision means:
(a) any provision of Division 40 of the Income Tax Assessment Act 1997 (other than Subdivision 40‑E); or
(b) any provision of Division 43 of that Act.
designated concession income has the same meaning as in Part X.
discretionary trust estate means a trust estate where:
(a) both of the following conditions are satisfied:
(i) a person (who may include the trustee) is empowered (either unconditionally or on the fulfilment of a condition) to exercise any power of appointment or other discretion;
(ii) the exercise of the power or discretion, or the failure to exercise the power or discretion, has the effect of determining, to any extent, either or both of the following:
(A) the identities of those who may benefit under the trust;
(B) how beneficiaries are to benefit, as between themselves, under the trust; or
(b) one or more of the beneficiaries under the trust have a contingent or defeasible interest in some or all of the corpus or income of the trust estate; or
(c) the trustee of another trust estate, being a trust estate where both of the conditions in paragraph (a) are satisfied, benefits, or is capable (whether by the exercise of a power of appointment or otherwise) of benefiting, under the first‑mentioned trust estate.
eligible designated concession income has the same meaning as in Part X.
entity means any of the following:
(a) a company;
(b) a partnership;
(c) a person in the capacity of trustee;
(d) any other person.
exempt income, in relation to a trust estate, means the exempt income of the trust estate calculated as if the trustee were a taxpayer who was a resident.
IP time means 7.30 p.m., by standard time in the Australian Capital Territory, on 12 April 1989.
listed country has the same meaning as in Part X.
listed country trust estate has the meaning given by section 102AAE.
net income, in relation to a trust estate, in relation to a year of income, means:
(b) if the trust estate is a public trading trust in relation to the year of income—the net income (within the meaning of Division 6C) of the public trading trust of the year of income; or
(c) in any other case—the net income (within the meaning of Division 6) of the trust estate.
non‑attributable year of income, in relation to a trust estate, means a non‑resident year of income of the trust estate where no amount calculated by reference to the attributable income of the trust estate of that year of income is included in the assessable income of any taxpayer under subsection 102AAZD(1).
non‑discretionary trust estate means a trust estate other than a discretionary trust estate.
non‑resident family trust has the meaning given by section 102AAH.
non‑resident trust estate (except in section 102AAA), in relation to a year of income, means a trust estate that is not a resident trust estate in relation to the year of income.
non‑resident year of income, in relation to a trust estate, means a year of income in relation to which the trust estate is a non‑resident trust estate.
profits includes gains, whether of an income or capital nature.
property includes money.
public trading trust, in relation to a year of income, means a unit trust that is a public trading trust in relation to the year of income for the purposes of Division 6C.
public unit trust has the meaning given by section 102AAF.
resident trust estate, in relation to a year of income, means:
(a) a resident trust estate in relation to the year of income within the meaning of Division 6; or
(b) a unit trust that is a public trading trust, in relation to the year of income; or
(c) a complying superannuation fund, a non‑complying superannuation fund, a complying approved deposit fund, a non‑complying approved deposit fund or a pooled superannuation trust in relation to the year of income.
scheme means:
(a) any agreement, arrangement, understanding, promise or undertaking, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings; and
(b) any scheme, plan, proposal, action, course of action or course of conduct, whether there are 2 or more parties or only one party involved.
services includes any benefit, right (including a right in relation to, and an interest in, real or personal property), privilege or facility and, without limiting the generality of the foregoing, includes a benefit, right, privilege, service or facility that is, or is to be, provided under:
(a) an arrangement for or in relation to:
(i) the performance of work (including work of a professional nature), whether with or without the provision of property; or
(ii) the provision of, or of the use of facilities for, entertainment, recreation or instruction; or
(iii) the conferring of benefits, rights or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction; or
(b) a contract of insurance; or
(c) an arrangement for or in relation to the lending of money.
subject to tax has the same meaning as in Part X.
tax accounting period has the same meaning as in Part X.
tax law, in relation to a listed country or an unlisted country, has the same meaning as in Part X.
tax offset has the same meaning as in the Income Tax Assessment Act 1997.
transfer:
(a) in relation to property—includes dispose of (whether by assignment, declaration of trust or otherwise) or provide; and
(b) in relation to services—includes allow, confer, give, grant, perform or provide.
trust estate, in relation to a transfer of property or services, means the trust estate or, as the case requires, the trustee of the trust estate.
underlying transfer, in relation to a transfer of property or services to a trust estate, means:
(a) if that transfer was an actual transfer—the actual transfer; or
(b) if that transfer was taken to have been made because of subsection 102AAK(1)—the actual transfer referred to in that subsection; or
(c) if that transfer was taken to have been made because of subsection 102AAK(2)—the actual transfer referred to in paragraph 102AAK(2)(d); or
(d) if that transfer was taken to have been made because of subsection 102AAK(5)—the actual transfer referred to in paragraph 102AAK(5)(b); or
(e) if that transfer was taken to have been made because of the application of subsection 102AAK(6) or (8) to an actual transfer—the actual transfer; or
(f) if that transfer was taken to have been made because of the application of subsection 102AAK(6) or (8) to a transfer that was taken to have been made because of subsection 102AAK(1)—the actual transfer referred to in subsection 102AAK(1); or
(g) if that transfer was taken to have been made because of the application of subsection 102AAK(6) or (8) to a transfer that was taken to have been made because of subsection 102AAK(5)—the actual transfer referred to in paragraph 102AAK(5)(b); or
(h) if that transfer was taken to have been made because of subsection 102AAK(10)—the actual transfer referred to in paragraph 102AAK(10)(b); or
(j) if that transfer was taken to have been made because of one or more applications of subsection 102AAK(11) to an actual transfer—the actual transfer; or
(k) if that transfer was taken to have been made because of one or more applications of subsection 102AAK(11) to a transfer (in this paragraph called the deemed transfer) that was taken to have been made because of subsection 102AAK(1), (2), (5), (6), (8) or (10)—the actual transfer that, under a preceding paragraph of this definition, is the underlying transfer in relation to the deemed transfer.
underlying transferor, in relation to a transfer of property or services to a trust estate, means the entity who made the underlying transfer concerned.
unlisted country has the same meaning as in Part X.
weighted statutory interest rate, in relation to a year of income, means:
(a) if there is only one base interest rate in relation to the year of income—that rate; or
(b) if there are 2 or more base interest rates in relation to the year of income—the weighted average of the base rates for the year of income.
102AAC Each listed country and unlisted country to be treated as a separate foreign country
For the purposes of the application of section 6AB to this Division, each listed country and each unlisted country is to be treated as a separate foreign country.
102AAD Subject to tax—application of subsection 324(2)
Subsection 324(2) applies in relation to this Division in a corresponding way to the way in which it applies in relation to Part X.
102AAE Listed country trust estates
(1) For the purposes of this Division, a trust estate is taken to be a listed country trust estate in relation to a year of income if, and only if, either of the following paragraphs applies to each item of income or profit derived by the trust estate in the year of income:
(a) the income or profit is either:
(i) subject to tax in a listed country in a tax accounting period ending before the end of the year of income or commencing during the year of income; or
(ii) designated concession income in relation to any listed country;
(b) both of the following conditions are satisfied:
(i) a part of the income or profit is either:
(A) subject to tax in a listed country in a tax accounting period ending before the end of the year of income or commencing during the year of income; or
(B) designated concession income in relation to any listed country;