(1) In this Act, unless the contrary intention appears:
applied penalty tax means a penalty under Part 4‑25 in Schedule 1 to the Taxation Administration Act 1953 in relation to trust recoupment tax.
Assessment Act means the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997.
associate has the same meaning in relation to a person as that expression has in relation to a person in section 318 of the Assessment Act.
company does not include a company in the capacity of trustee of a trust estate.
company taxable amount, in relation to a person, means an amount that is a company taxable amount in relation to the person under section 7.
distribution of income means:
(a) in relation to a company in relation to a particular time—a distribution of income of the company of the year of income of the company in which that time occurred among the shareholders of the company at that time, being a distribution of income by payment of a dividend; and
(b) in relation to a trust estate in relation to a particular time—a distribution of income of the trust estate of the year of income of the trustee in which that time occurred among the beneficiaries of the trust estate at that time and the persons who could have become beneficiaries of the trust estate at that time by the exercise of a power of appointment by the trustee of the trust estate or by another person, being a distribution of income that is paid to, or applied for the benefit of, those persons as beneficiaries of the trust estate.
elected taxable amount, in relation to a person, means an amount that is an elected taxable amount in relation to the person under subsection 7(7).
eligible beneficiaries class, in relation to a secondary taxable amount, means the eligible beneficiaries class ascertained under section 6 in relation to that secondary taxable amount.
late payment tax means general interest charge under Part IIA of the Taxation Administration Act 1953 in relation to trust recoupment tax, applied penalty tax or penalty tax.
penalty tax means additional tax payable under section 12.
person includes a company and a person in the capacity of trustee of a trust estate.
prescribed person, in relation to a taxable amount, means:
(a) a natural person other than a person in the capacity of trustee of a trust estate;
(b) a person (other than a person referred to in paragraph (c)) in respect of whom a relevant exempting provision applied in relation to the year of income to which the taxable amount relates;
(c) a person in the capacity of trustee of a trust estate, being a trust estate that is a provident, benefit, superannuation or retirement fund; or
(d) a company that is, by virtue of the application of paragraph 103A(2)(c) or subparagraph 103A(2)(d)(i), (iii) or (iv) of the Assessment Act, a public company for the purposes of Division 7 of Part III of that Act in relation to the year of income to which the taxable amount relates.
primary taxable amount, in relation to a person, means an amount that is a primary taxable amount in relation to the person under section 5.
primary trust income, in relation to a primary taxable amount that exists in relation to the trustee of a trust estate, means the income or the part of the income of the trust estate to which the primary taxable amount is attributable.
property includes:
(a) a chose in action;
(b) any estate, interest, right or power, whether at law or in equity, in or over property; and
(c) any right to receive income.
relevant distribution time, in relation to a taxable amount that exists in relation to a company or the trustee of a trust estate, means:
(a) if the company or trust estate did not exist immediately before the tax avoidance scheme to which the taxable amount relates was entered into—the time when the company or trust estate commenced to exist; or
(b) in any other case—the time immediately before the time when the tax avoidance scheme to which the taxable amount relates was entered into;
or, if the Commissioner is of the opinion that that time is inappropriate, such later time as the Commissioner determines.
relevant exempting provision has the same meaning as in Division 9C of Part III of the Assessment Act.
right to receive income means a right of a person to have income that will or may be derived (whether from property or otherwise) paid to, or applied or accumulated for the benefit of, the person.
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.
secondary taxable amount, in relation to a person or persons, means an amount that is a secondary taxable amount under section 6 in relation to an eligible beneficiaries class in which the person is, or the persons are, included.
taxable amount means a primary taxable amount, a secondary taxable amount, a company taxable amount or an elected taxable amount.
trust recoupment tax means tax assessed under this Act and imposed by the Trust Recoupment Tax Act 1985.
(2) The reference in the definition of scheme in subsection (1) to a scheme, plan, proposal, action, course of action or course of conduct shall be read as including a reference to a unilateral scheme, plan, proposal, action, course of action or course of conduct, as the case may be.
(3) In this Act, a reference to the time of entry into a scheme is a reference to:
(a) if the scheme is a unilateral scheme—the time when the scheme is commenced to be carried out; and
(b) in any other case—the time when the scheme is entered into.
(4) For the purposes of this Act, a scheme shall be taken to be a tax avoidance scheme if and only if, having regard to:
(a) the manner in which the scheme was entered into or carried out;
(b) the form and substance of the scheme;
(c) the time at which the scheme was entered into and the length of the period during which the scheme was carried out;
(d) the result in relation to the operation of the Assessment Act that, but for section 100A and Part IVA of that Act, would be achieved by the scheme;
(e) any change in the financial position of any person that has resulted, will result or may reasonably be expected to result from the scheme; and
(f) any other consequence for any person of the scheme having been entered into or carried out;
it would be concluded that the person, or any of the persons, who entered into or carried out the scheme or any part of the scheme did so for the purpose of securing that a person or persons (whether or not a particular person or particular persons) who, if the scheme had not been entered into or carried out, would have been liable to pay income tax in respect of a year of income would not be liable to pay income tax in respect of that year of income or would be liable to pay less income tax in respect of that year of income than the person or persons would have been liable to pay if the scheme had not been entered into or carried out.
(5) In subsection (4):
(a) a reference to the carrying out of a scheme or a part of a scheme by a person shall be read as including a reference to the carrying out of a scheme or a part of a scheme by a person together with another person or other persons; and
(b) a reference to a scheme or a part of a scheme being entered into or carried out by a person for a particular purpose shall be read as including a reference to a scheme or a part of a scheme being entered into or carried out by the person for 2 or more purposes of which that particular purpose is the dominant purpose.
(6) For the purposes of this Act, trust recoupment tax that has been assessed shall be deemed to be payable notwithstanding that it has not become due and payable.