(a) apart from this subsection, subsections (6), (10) and (11), an entity being the trustee of a trust estate (in this subsection called the transferor trust estate) transfers property or services (in this subsection called the transferred property or services) to another trust estate (in this subsection called the transferee trust estate) at a particular time (in this subsection called the transfer time); and
(b) the transferor trust estate was an Australian trust, or a controlled foreign trust, at the transfer time; and
(c) the transferor trust estate was a discretionary trust estate at the transfer time; and
(d) apart from this subsection, subsections (6), (10) and (11), one or more other entities transferred property or services to the transferor trust estate at or before the transfer time;
each of those other entities is taken to have transferred the transferred property or services to the transferee trust estate at the transfer time.
(9) Nothing in subsection (8) affects the application of this Division to the transfer mentioned in paragraph (8)(a).
(10) For the purposes of this Division, where:
(a) any of the following subparagraphs applies:
(i) any of the following events occurs in relation to a company (which company is in this subsection called the transferor):
(A) the company passes a resolution for its winding‑up;
(B) an order is made for the winding‑up of the company;
(C) any similar event;
(ii) a partnership (in this subsection also called the transferor) ceases to exist for the purposes of this Act;
(iii) either of the following sub‑subparagraphs applies in relation to the trustee of a trust estate (in this subsection also called the transferor):
(A) the trust estate commences to be wound‑up;
(B) the trust estate ceases to exist for the purposes of this Act; and
(b) an actual transfer of property or services is made to a trust estate (in this subsection called the transferee) as a consequence of the transferor being wound‑up or ceasing to exist;
the transferor is taken to have transferred to the transferee the property or services concerned.
(11) For the purposes of this Division, where:
(a) the following subparagraphs apply to an entity (in this subsection called the defunct entity):
(i) the defunct entity is a company, a partnership or the trustee of a trust estate;
(ii) the defunct entity transferred property or services to a trust estate (including a transfer that was taken to have been made because of another application or other applications of this subsection) at a particular time;
(iii) if the defunct entity is a company—any of the following events occurs:
(A) the company passes a resolution for its winding‑up;
(B) an order is made for the winding‑up of the company;
(C) any similar event;
(iv) if the defunct entity is a partnership—the partnership ceases to exist for the purposes of this Act;
(v) if the defunct entity is a trustee of a trust estate—either of the following sub‑subparagraphs applies:
(A) the trust estate commences to be wound‑up;
(B) the trust estate ceases to exist for the purposes of this Act; and
(b) the Commissioner is satisfied that another entity (in this subsection called the successor entity) has benefited or is capable (whether by the exercise of a power of appointment or otherwise) of benefiting (either directly or indirectly through one or more interposed companies, partnerships or trusts) by, or as a result of:
(i) a transfer of property or services made by the defunct entity; or
(ii) a transfer of property or services made as a consequence of the defunct entity being wound‑up or ceasing to exist; and
(c) the Commissioner is of the opinion that it is appropriate to apply this subsection to the successor entity;
the assessable income of the successor entity of the year of income in which the event, or the earliest event, mentioned in subparagraph (a)(iii), (iv) or (v) occurred and of each subsequent year of income is to be determined as if the successor entity had transferred to the trust estate mentioned in subparagraph (a)(ii), at the time mentioned in that subparagraph:
(d) the whole of the property or services mentioned in that subparagraph; or
(e) if the Commissioner thinks it appropriate—a part of the property or services referred to in that subparagraph.
102AAL Division not to apply to transfers by trustees of deceased estates
A reference in this Division to a transfer of property or services to a trust estate does not include a reference to a transfer made by the trustee of the estate of a deceased person under:
(a) the terms of the deceased person’s will or codicil; or
(b) an order of a court that varied or modified the provisions of the deceased person’s will or codicil;
unless:
(c) the transfer was made in or as the result of the exercise (by the trustee or any other person) of a power of appointment or any other discretion; or
(d) under subsection 102AAK(1), the property or services are taken to have been transferred by an entity other than the trustee, instead of by the trustee; or
(e) under subsection 102AAK(5), the Commissioner treats the property or services as having been (to any extent) transferred by an entity other than the trustee, instead of by the trustee.
Subdivision B—Payment of interest by taxpayer on distributions from certain non‑resident trust estates
102AAM Payment of interest by taxpayer on distributions from certain non‑resident trust estates
(1) For the purposes of this section, if:
(a) an amount is included in the assessable income of a taxpayer of a year of income (which year of income is in this section called the current year of income), being the year of income commencing on 1 July 1990 or a subsequent year of income, under section 99B in relation to a trust estate; and
(b) the whole or a part of the amount so included in the taxpayer’s assessable income (which whole or part is in this section called the distributed amount) is attributable to:
(i) if the trust estate was a listed country trust estate in relation to a particular non‑resident year of income of the trust estate (in this section called the non‑resident trust’s year of income)—so much of the income and profits of the trust estate of the non‑resident trust’s year of income as represents eligible designated concession income in relation to any listed country in relation to the non‑resident trust’s year of income; or
(ii) if the trust estate was not a listed country trust estate in relation to a particular non‑resident year of income of the trust estate (in this section also called the non‑resident trust’s year of income)—so much of the income and profits of the trust estate of the non‑resident trust’s year of income as has not been subject to tax in any listed country in a tax accounting period:
(A) ending before the end of the non‑resident trust’s year of income; or
(B) commencing during the non‑resident trust’s year of income;
then:
(c) the distributed amount is the distributed amount of the non‑resident trust’s year of income; and
(d) the taxpayer is the original taxpayer in relation to the distributed amount of the non‑resident trust’s year of income.
(1A) For the purposes of subsection (1), unless the contrary is established by the taxpayer:
(a) a distributed amount in relation to a listed country trust estate in relation to a non‑resident trust’s year of income is taken to be wholly attributable to income and profits of the trust estate of that year of income that represent eligible designated concession income in relation to a listed country; and
(b) a distributed amount in relation to a trust estate that was not a listed country trust estate in relation to a non‑resident trust’s year of income is taken to be wholly attributable to income and profits of the trust estate of that year of income that have not been subject to tax in any listed country in a tax accounting period.
(1B) This section does not apply to a distributed amount that is attributable to income or profits of the estate of a deceased person if the amount was paid to, or applied for the benefit of, the taxpayer within 3 years after the death of that person.
(1C) This section does not apply to a distributed amount that was included in the assessable income of a taxpayer of a year of income under section 99B in relation to a trust estate if, at all times during the year of income, the trust:
(a) was a public unit trust; and
(b) was not a controlled foreign trust.
(2) Subject to this section, if the original taxpayer in relation to the distributed amount of the non‑resident trust’s year of income is:
(a) a company or a natural person (other than a company or a natural person in the capacity of a trustee); or
(c) the trustee of a public trading trust in relation to the current year of income; or
(d) the trustee of 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 current year of income;
the taxpayer is liable to pay interest to the Commissioner in respect of the distributed amount of the non‑resident trust’s year of income, calculated under subsection (5), on the amount calculated using the formula:
Start formula open bracket Distributed amount times Applicable rate of tax close bracket minus FITO end formula
where:
Distributed amount means the distributed amount of the non‑resident trust’s year of income.
Applicable rate of tax has the meaning given by subsection (10).
FITO (Foreign income tax offset) means so much of any tax offset under Division 770 of the Income Tax Assessment Act 1997 to which the taxpayer is entitled as is attributable to the distributed amount of the non‑resident trust’s year of income.
(3) Subject to this section, if:
(a) the original taxpayer in relation to the distributed amount of the non‑resident trust’s year of income is the trustee of a trust estate who is liable to be assessed and pay tax under section 98, 99 or 99A in respect of a part of, or a share in, the net income of the trust estate; and
(b) the whole or a part (which whole or part is in this subsection called the taxpayer’s portion of the distributed amount of the non‑resident trust’s year of income) of the part or share of the net income is attributable to the distributed amount of the non‑resident trust’s year of income;
the taxpayer is liable to pay interest to the Commissioner in respect of the taxpayer’s portion of the distributed amount of the non‑resident trust’s year of income, calculated under subsection (5), on the amount calculated using the formula:
Start formula open bracket Taxpayer’s portion of the distributed amount times Applicable rate of tax close bracket minus FITO end formula
where:
Taxpayer’s portion of the distributed amount means the taxpayer’s portion of the distributed amount of the non‑resident trust’s year of income.
Applicable rate of tax has the meaning given by subsection (10).
FITO (Foreign income tax offset) means so much of any tax offset under Division 770 of the Income Tax Assessment Act 1997 to which the taxpayer is entitled as is attributable to the taxpayer’s portion of the distributed amount of the non‑resident trust’s year of income.
(4) Subject to this section, if:
(a) the original taxpayer in relation to the distributed amount of the non‑resident trust’s year of income is the trustee of a trust estate or a partnership; and
(b) the following conditions are satisfied in relation to another taxpayer (in this subsection called the actual taxpayer):
(i) an amount is included in the assessable income of the actual taxpayer of a year of income under subsection 92(1) or section 97, 98A or 100;
(ii) the actual taxpayer is:
(A) a company or a natural person (other than a company or a natural person in the capacity of a trustee); or
(B) the trustee of 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; or
(D) the trustee of a public trading trust in relation to the year of income; or
(E) the trustee of a trust estate who is liable to be assessed and pay tax under section 98, 99 or 99A in respect of a part of, or a share in, the net income of a trust estate;
(iii) if sub‑subparagraph (ii)(A), (B), (C) or (D) applies—the whole or a part of the amount so included in the actual taxpayer’s assessable income (which whole or part is in this subsection called the taxpayer’s portion of the distributed amount of the non‑resident trust’s year of income) is attributable (either directly or indirectly through one or more interposed partnerships or trusts) to the distributed amount of the non‑resident trust’s year of income;
(iv) if sub‑subparagraph (ii)(E) applies—the whole or a part (which whole or part is in this subsection also called the taxpayer’s portion of the distributed amount of the non‑resident trust’s year of income) of the part or share of the net income is attributable (either directly or indirectly through one or more interposed partnerships or trusts) to the distributed amount of the non‑resident trust’s year of income;
the actual taxpayer is liable to pay interest to the Commissioner in respect of the taxpayer’s portion of the distributed amount of the non‑resident trust’s year of income, calculated under subsection (5), on the amount calculated using the formula:
Start formula open bracket Taxpayer’s portion of the distributed amount times Applicable rate of tax close bracket minus FITO end formula
where:
Taxpayer’s portion of the distributed amount means the taxpayer’s portion of the distributed amount of the non‑resident trust’s year of income.
Applicable rate of tax has the meaning given by subsection (10).
FITO (Foreign income tax offset) means so much of any tax offset under Division 770 of the Income Tax Assessment Act 1997 to which the taxpayer is entitled as is attributable to the taxpayer’s portion of the distributed amount of the non‑resident trust’s year of income.
(4A) If:
(a) paragraph 102UK(2)(b) or 102UM(2)(b) has the effect that the whole or a part of a share of the net income of a trust estate (the first trust estate) is not included in the assessable income of the trustee of another trust estate (the second trust estate); and
(b) the whole or the part of the share (which whole or part is in this subsection called the taxpayer’s portion of the distributed amount of the non‑resident trust’s year of income) is attributable (either directly or indirectly through one or more interposed partnerships or trusts) to the distributed amount of the non‑resident trust’s year of income; and
(c) if paragraph 102UK(2)(b) or 102UM(2)(b) were ignored, the second trust estate would be an interposed trust mentioned in applying subparagraph (4)(b)(iii) or (iv) of this section; and
(d) this subsection does not also apply to the trustee of a trust interposed between the first trust estate and the non‑resident trust;
the trustee of the first trust estate is liable to pay interest to the Commissioner in respect of the taxpayer’s portion of the distributed amount of the non‑resident trust’s year of income, calculated under subsection (5), on the amount calculated using the formula:
Start formula open bracket Taxpayer’s portion of the distributed amount times Applicable rate of tax close bracket minus FITO end formula
where:
applicable rate of tax has the meaning given by subsection (10).
FITO (Foreign income tax offset) means so much of any tax offset under Division 770 of the Income Tax Assessment Act 1997 to which the trustee of the first trust would be entitled, in respect of the taxpayer’s portion of the distributed amount of the non‑resident trust’s year of income, if the taxpayer’s portion of the distributed amount of the non‑resident trust’s income were an amount in respect of which the trustee were liable to be assessed and to pay tax under section 99A.
taxpayer’s portion of the distributed amount means the taxpayer’s portion of the distributed amount of the non‑resident trust’s year of income.
(5) Interest payable by a taxpayer under this section is to be calculated:
(a) in respect of the period commencing at whichever of the following times is the latest:
(i) the beginning of the first year of income of the taxpayer that begins after the end of the non‑resident trust’s year of income;
(ii) the beginning of the year of income of the taxpayer commencing on 1 July 1990;
(iii) if the taxpayer is a natural person (other than a natural person in the capacity of a trustee) who first commenced to be a resident of Australia at a time (in this subparagraph called the first residence time) on or after 1 July 1990—the beginning of the year of income of the taxpayer next following the year of income of the taxpayer in which the first residence time occurred;
and ending at the end of the assessment year of income; and
(b) at the base interest rate.
(6) Where the assessable income of a taxpayer of a year of income includes one or more of the following amounts in relation to one or more non‑resident years of income of a particular trust estate (which amounts are in this subsection called the principal amounts):
(a) the distributed amount of the non‑resident trust’s year of income;
(b) the taxpayer’s portion of the distributed amount of the non‑resident trust’s year of income;
the aggregate of the interest payable by the taxpayer in respect of the principal amounts is not to exceed the difference between: