(d) so much of the tax payable in respect of the year of income as is attributable to the aggregate of the principal amounts (ignoring any tax offset under Part 3‑6 of the Income Tax Assessment Act 1997).
(7) For the purposes of this section, the extent to which an amount (in this subsection called the section 99B amount) included in the assessable income of a taxpayer of a year of income under section 99B in relation to a trust estate is attributable to an amount (in this subsection called the trust amount) covered by subparagraph (1)(b)(i) or (ii) is to be determined in accordance with the following paragraphs:
(a) in all cases—distributions of income and profits of the trust estate are to be taken to have been made in the following order:
(i) first, from income and profits of the earliest non‑resident year of income;
(ii) then, successively from income and profits of successive subsequent years of income;
(b) if subparagraph (1)(b)(i) applies—the extent to which the amount (in this paragraph called the adjusted section 99B amount), being so much of the section 99B amount as is attributable to the income and profits of the trust estate of the non‑resident trust’s year of income, represents eligible designated concession income in relation to any listed country in relation to the non‑resident trust’s year of income is calculated using the formula:
Start formula Adjusted section 99B amount times start fraction Eligible designated concession income over Total income end fraction end formula
where:
Adjusted section 99B amount means the adjusted section 99B amount.
Eligible designated concession income means the number of dollars in the amount, being 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.
Total income means the number of dollars in the income and profits of the trust estate of the non‑resident trust’s year of income.
(c) if subparagraph (1)(b)(ii) applies—the extent to which the amount (in this paragraph called the adjusted section 99B amount), being so much of the section 99B amount as is attributable to the income and profits of the trust estate of the non‑resident trust’s year of income, represents income and profits that have not been subject to tax in a listed country in a tax accounting period mentioned in that subparagraph is calculated using the formula:
Start formula Adjusted section 99B amount times start fraction Untaxed income over Total income end fraction end formula
where:
Adjusted section 99B amount means the adjusted section 99B amount.
Untaxed income means the number of dollars in the amount, being so much of the income and profits of the trust estate of the non‑resident trust’s year of income as is not subject to tax in any listed country in a tax accounting period mentioned in that subparagraph.
Total income means the number of dollars in the income and profits of the trust estate of the non‑resident trust’s year of income.
(8) For the purposes of subsection (7), an amount of income or profits of a trust estate is to be taken to be distributed if the amount is paid to, or applied for the benefit of (within the meaning of section 99B), a beneficiary of the trust estate.
(9) Where, apart from this subsection, the amount of interest that would be payable under this section by a taxpayer in respect of the distributed amount of a non‑resident trust’s year of income, or in respect of the taxpayer’s portion of the distributed amount of a non‑resident trust’s year of income, is less than 50 cents, interest is not payable by the taxpayer under this section.
(10) For the purposes of this section, the applicable rate of tax in relation to a taxpayer is:
(a) if the taxpayer is a company (other than a company in the capacity of a trustee)—the corporate tax rate for the year of tax to which the assessment year of income relates; or
(b) in any other case—the maximum rate specified in the table in Part I of Schedule 7 of the Income Tax Rates Act 1986 that applies for the assessment year of income.
(10A) Paragraph (10)(b) has effect as if the maximum rate specified as mentioned in that paragraph was increased by 2 percentage points for assessment years of income that correspond to the temporary budget repair levy years (within the meaning of section 4‑11 of the Income Tax (Transitional Provisions) Act 1997).
(11) For the purposes of the application of this section to a taxpayer, the assessment year of income is:
(a) if subsection (2) or (3) applies—the current year of income; or
(b) if subsection (4) applies—the year of income referred to in subparagraph (4)(b)(i).
(12) For a taxpayer who is not a full self‑assessment taxpayer for the assessment year of income, the Commissioner must make an assessment of the interest payable by the taxpayer under this section.
(13A) If:
(a) a taxpayer is a full self‑assessment taxpayer for the assessment year of income; and
(b) the taxpayer lodges a return for that year;
then:
(c) the Commissioner is taken to have made an assessment of the interest payable by the taxpayer under this section for the year, equal to the amount specified in the return as the interest so payable; and
Note: If any interest is so payable, the return must specify the amount: see section 161AA.
(d) the assessment is taken to have been made on the day on which the return is lodged; and
(e) the return is taken to be a notice of that assessment given to the taxpayer by the Commissioner on that day.
102AAN Collection etc. of interest
Sections 170, 172, 174, 254 and 255 of this Act, and Division 5 of the Income Tax Assessment Act 1997 (How to work out when to pay your income tax), apply to interest payable under section 102AAM in the same way as they apply to income tax.
Subdivision D—Accruals system of taxation of certain non‑resident trust estates
102AAS Object of Subdivision
The object of this Subdivision is to set out rules relating to the following:
(a) the determination of attributable taxpayer status (section 102AAT);
(b) the calculation of the attributable income of a trust estate (sections 102AAU to 102AAZC (inclusive));
(c) the inclusion of amounts in assessable income (sections 102AAZD, 102AAZE and 102AAZF);
(d) the keeping of associated records (section 102AAZG).
102AAT Accruals system of taxation—attributable taxpayer
(1) Subject to this Division, for the purposes of this Division, an entity is an attributable taxpayer in relation to a year of income of the entity (which year of income is in this section called the entity’s current year of income) and in relation to a particular trust estate if, and only if:
(a) either of the following subparagraphs applies:
(i) all of the following conditions are satisfied:
(A) the trust estate was a discretionary trust estate at any time during the entity’s current year of income;
(B) the trust estate was not a public unit trust at all times during the entity’s current year of income;
(C) the entity has transferred property or services to the trust estate at a time (in this subparagraph called the transfer time) before or during the entity’s current year of income;
(D) if the underlying transfer was made in the course of carrying on a business—it is not the case that, at or about the time of the underlying transfer, identical or similar property or services were transferred by the underlying transferor in the ordinary course of business to ordinary clients or customers under arm’s length transactions and in similar circumstances and subject to identical or similar terms and conditions as those that applied in relation to the underlying transfer of the property or services concerned;
(E) if the underlying transfer was made under an arm’s length transaction otherwise than in the course of carrying on a business—the entity was in a position, at any time after the transfer time and before the end of the entity’s current year of income, to control the trust estate;
(F) if the transfer was made before the IP time and the trust estate was in existence, and was a discretionary trust estate, at the IP time—the entity was in a position, at any time after the IP time and before the end of the entity’s current year of income, to control the trust estate;
(ii) all of the following conditions are satisfied:
(A) the trust estate was a non‑discretionary trust estate, or a public unit trust, at all times during the entity’s current year of income when the trust estate was in existence;
(B) the entity has transferred property or services to the trust estate after the IP time and before or during the entity’s current year of income;
(C) the underlying transfer was made for no consideration or for a consideration less than the arm’s length amount in relation to the underlying transfer;
(D) it is not the case that the sole purpose of the underlying transfer was the acquisition of units in the trust estate where the parties to the underlying transfer were at arm’s length with each other in relation to the underlying transfer and the trust estate was a public unit trust at all times during the entity’s current year of income when the trust estate was in existence; and
(b) if the entity is a natural person (other than a natural person in the capacity of a trustee):
(i) if:
(A) the natural person first commenced to be a resident of Australia at a time (in this subparagraph called the first residence time) after the IP time and before the end of the entity’s current year of income; and
(B) the transfer, or each of the transfers, covered by paragraph (a) was made before the first residence time;
the trust estate was not a non‑resident family trust in relation to the natural person at all times:
(C) after the beginning of the first year of income of the natural person after the first residence time; and
(D) before the end of the entity’s current year of income;
when the trust estate was in existence; or
(ii) in any other case—the trust estate was not a non‑resident family trust in relation to the natural person at all times after the beginning of the year of income of the taxpayer commencing on 1 July 1990 and before the end of the entity’s current year of income when the trust estate was in existence; and
(c) it is not the case that:
(i) the entity 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 paragraph called the first residence time) after the IP time and before the end of the entity’s current year of income; and
(ii) the transfer was made before the first residence time; and
(iii) the entity was not in a position to control the trust estate at any time during the period:
(A) commencing at the beginning of the first year of income of the entity after the first residence time; and
(B) ending at the end of the entity’s current year of income.
(2) For the purposes of this section, if:
(a) an entity (in this subsection called the transferor) being a partnership is an attributable taxpayer in relation to the entity’s current year of income and in relation to a particular trust estate (in this subsection called the transferee trust estate) because of one or more transfers (being actual transfers or transfers taken to have been made because of subsection 102AAK(1), (2) or (5)) of property or services made by the transferor to the transferee trust estate; or
(b) an entity (in this subsection also called the transferor) being a trust estate is an attributable taxpayer in relation to the entity’s current year of income and in relation to another trust estate (in this subsection also called the transferee trust estate) because of one or more transfers (being actual transfers or transfers taken to have been made because of subsection 102AAK(1), (2) or (5)) of property or services made by the transferor to the transferee trust estate;
the question whether any other entity is an attributable taxpayer in relation to the same year of income and in relation to the transferee trust estate is to be determined as if:
(c) if paragraph (a) applies—subsection 102AAK(6) did not apply in relation to any of the transfers mentioned in that paragraph; or
(d) if paragraph (b) applies—subsection 102AAK(8) did not apply in relation to any of the transfers mentioned in that paragraph.
(3) If:
(a) apart from this subsection, an entity, being a natural person (other than a natural person in the capacity of a trustee), is not an attributable taxpayer in relation to the entity’s current year of income and in relation to a trust estate; and
(b) apart from paragraph (1)(b), the entity would have been such an attributable taxpayer; and
(c) apart from subparagraph 102AAH(2)(b)(i) or (3)(a)(ii), the trust estate was not a non‑resident family trust in relation to the natural person at some time after the entity’s current year of income when the natural person was alive and the trust estate was in existence;
the following provisions have effect:
(d) subsection (1) has effect as if paragraph (1)(b) had applied;
(e) section 170 does not prevent the amendment of an assessment at any time for the purposes of giving effect to this subsection.
(4) If:
(a) apart from this subsection, an entity is not an attributable taxpayer in relation to the entity’s current year of income and in relation to a trust estate; and
(b) apart from sub‑subparagraph (1)(a)(i)(E) or (F) or paragraph (1)(c), the entity would have been such an attributable taxpayer; and
(c) the entity was in a position to control the trust estate at some time after the entity’s current year of income when the trust estate was in existence;
the following provisions have effect:
(d) subsection (1) has effect as if sub‑subparagraph (1)(a)(i)(E) or (F) or paragraph (1)(c), as the case may be, had applied;
(e) section 170 does not prevent the amendment of an assessment at any time for the purposes of giving effect to this subsection.
102AAU Attributable income of a trust estate
(1) Subject to this Subdivision, the attributable income of a non‑resident trust estate of a year of income is:
(a) if the non‑resident trust estate is not a listed country trust estate in relation to the year of income—the net income of the non‑resident trust estate of the year of income; or
(b) if the non‑resident trust estate is a listed country trust estate in relation to the year of income—the amount that would have been the net income of the non‑resident trust estate of the year of income if the exempt income of the trust estate included all income and profits of the trust estate, other than eligible designated concession income in relation to any listed country in relation to the year of income;
reduced by:
(c) so much (if any) of the amount covered by paragraph (a) or (b) as represents:
(i) an amount:
(A) that is or has been included in the assessable income of a beneficiary under section 97; or
(B) in respect of which the trustee of the non‑resident trust estate is or has been assessed and liable to pay tax under section 98, 99 or 99A; or
(C) on which trustee beneficiary non‑disclosure tax is payable under Division 6D; or
(ii) an amount:
(A) that is paid to a beneficiary, being a resident of a listed country, during the period of 13 months commencing at the beginning of the year of income; and
(B) 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
(iii) an amount that consists of, or is attributable to, the franked part of a distribution, or the part of a distribution that has been franked with an exempting credit; or
(v) if an amount is or has been included in the assessable income of any taxpayer under section 102AAZD because the taxpayer is an attributable taxpayer in relation to any year of income (in this subparagraph called the taxpayer’s year of income) and in relation to a trust estate other than the non‑resident trust estate—so much of an amount paid to the trustee of the non‑resident trust estate as represents the attributable income of that other trust estate of the taxpayer’s year of income; or
(vii) if:
(A) an attribution account payment is made to the trustee of the trust estate during the year of income; and
(B) the making of the attribution account payment gives rise to an attribution debit, in relation to any taxpayer, for the entity making the payment;
the amount of the attribution debit; or
(viii) an amount of income or profits of the trust estate:
(A) that is subject to tax in any listed country in a tax accounting period ending before the end of the year of income or commencing during the year of income; and
(B) that is not eligible designated concession income in relation to any listed country in relation to the year of income; and
(d) so much of any foreign tax or Australian tax paid by the trustee or a beneficiary as is attributable to so much of the amount covered by paragraph (a) or (b), as the case requires, as remains after the reduction or reductions covered by paragraph (c).
(2) The attributable income of a resident trust estate of a year of income is 0.
(3) For the purposes of sub‑subparagraph (1)(c)(ii)(A), a beneficiary is to be taken to be a resident of a listed country if, and only if, the beneficiary is treated as a resident of the listed country for the purposes of the tax law of the listed country.
(4) If the tax law of a listed country adopts some criterion other than treatment as a resident as the criterion for applying a worldwide source tax base to a beneficiary, then, subsection (3) has effect, in relation to that tax law, as if that criterion were the same as treatment as a resident of the listed country for the purposes of that tax law.