Commonwealth Consolidated Acts Commonwealth Consolidated Acts
Income Tax Assessment Act 1997
1 Paragraph 152 - 30(2)(a)
Before "beneficially own", insert "except where the other entity is a discretionary trust--".
2 At the end of subsection 152 - 30(2)
Add:
Note: There are further rules relating to discretionary trusts in subsections ( 4) to (6C).
3 Subsection 152 - 30(3)
After " subsection ( 2)", insert "or (5)".
4 Subsections 152 - 30(5) and (6)
Repeal the subsections, substitute:
Control of discretionary trust
(5) An entity (the first entity ) controls a discretionary trust if, for any of the 4 income years before the income year for which relief is sought for a * CGT event under this Division:
(a) the trustee paid to, or applied for the benefit of:
(i) the first entity; or
(ii) one or more of the first entity's * small business CGT affiliates; or
(iii) the first entity and one or more of the first entity's small business CGT affiliates;
any of the income or capital of the trust; and
(b) the amount paid or applied is at least 40% (the control percentage ) of the total amount of income or capital paid or applied by the trustee for that income year.
(6) An entity does not control a discretionary trust because of subsection ( 5) if the entity is:
(a) an * exempt entity; or
(b) a * deductible gift recipient.
(6A) The trustee of a discretionary trust may, for an income year for which the trust had a * tax loss and for which the trustee did not pay or apply any income or capital of the trust, nominate not more than 4 beneficiaries as being controllers of the trust.
Note: The trust might not have had the funds to make a distribution for that income year, which would prevent it from being controlled in that year. The trustee may wish to make the nomination to ensure that a relevant CGT asset is treated as an active asset (see section 152 - 40).
(6B) This section has effect as if each nominated beneficiary controlled the trust during the relevant income year in the way described in this section.
(6C) A nomination must be in writing and signed by the trustee and by each nominated beneficiary.
5 Subsection 152 - 30(8)
Repeal the subsection, substitute:
(8) However, if an entity (the first entity ) controls an entity of a kind referred to in subsection ( 9) (the public entity ), this section does not, merely because of subsection ( 7), apply to the first entity as if it controlled any other entity that is controlled by the public entity.
(9) The kinds of entities are:
(a) a company * shares in which (except shares that carry the right to a fixed rate of * dividend) are listed for quotation in the official list of an * approved stock exchange; or
(b) a * publicly traded unit trust; or
(c) a * mutual insurance company; or
(d) a * mutual affiliate company; or
(e) a company (other than one covered by paragraph ( a)) all the shares in which are beneficially owned by one or more of the following:
(i) a company covered by paragraph ( a);
(ii) a publicly traded unit trust;
(iii) a mutual insurance company;
(iv) a mutual affiliate company.
6 Subsection 152 - 305(3)
Omit "(within the meaning of subsection 152 - 30(6))", substitute "of a kind referred to in subsection 152 - 30(9)".
7 Application of amendments
The amendments made by this Schedule apply to CGT events happening after 11.45 am, by legal time in the Australian Capital Territory, on 21 September 1999.
8 Transitional: general
(1) In this item and in item 9:
assent day means the day on which this Act receives the Royal Assent.
(2) The subsection 152 - 30(5) of the Income Tax Assessment Act 1997 inserted by this Schedule applies to assessments for the 1999 - 2000, 2000 - 01 and 2001 - 02 income years as if the reference to any of the 4 income years before the income year for which relief is sought for a CGT event under Division 152 of that Act were a reference to the income year for which that relief is sought.
(3) The following subitems apply in relation to:
(a) a CGT event that happened before the assent day; and
(b) an entity who becomes eligible to make a choice under Division 152 of the Income Tax Assessment Act 1997 in relation to that event because of this Schedule.
(4) Despite subsection 103 - 25(1) of the Income Tax Assessment Act 1997 , any such choice must be made by the entity by the latest of:
(a) the day the entity lodges its income tax return for the income year in which the relevant CGT event happened; and
(b) 12 months after the assent day; and
(c) a later day allowed by the Commissioner of Taxation.
(5) The period within which the entity must acquire a replacement asset as mentioned in subsection 152 - 420(1) or (2) of the Income Tax Assessment Act 1997 ends on the latest of:
(a) 2 years after the happening of the last CGT event in the income year for which the entity obtained the small business roll - over; and
(b) 12 months after the assent day; and
(c) a later day allowed by the Commissioner of Taxation.
(6) The period within which a replacement asset the entity acquires must be an active asset as mentioned in subsection 152 - 420(4) of the Income Tax Assessment Act 1997 (if it is not an active asset when acquired) ends on the latest of:
(a) 2 years after the happening of the last CGT event in the income year for which the entity obtained the small business roll - over; and
(b) 12 months after the assent day; and
(c) a later day allowed by the Commissioner of Taxation.
9 Transitional: choice
(1) This item applies to CGT events that happen no later than the end of the 2003 - 04 income year.
(2) Subject to subitem ( 3), an entity can choose that Division 152 of the Income Tax Assessment Act 1997 apply to such a CGT event as if the amendments made by this Schedule had not been made.
(3) However, subsection 152 - 30(6) inserted by item 4 of this Schedule applies to those CGT events.
(4) A choice under this item must be made by the latest of:
(a) the day the entity lodges its income tax return for the income year in which the relevant CGT event happened; and
(b) 12 months after the assent day; and
(c) a later day allowed by the Commissioner of Taxation.