Private ruling: Unit Trust- State Territory Body (STB)
Published: May 2012
Ruling period: Years ended 30 June 2011 to 30 June 2016
Date scheme commenced: 1 July 2010

Ruling: Q1: Does the Taxpayer as Trustee for the Unit Trust satisfy the conditions of section 24AS of the Income Tax Assessment Act 1936 (ITAA 1936) so as to constitute an STB? | A1: Yes | Q2: Is the Unit Trust an excluded STB in terms of section 24AT of the ITAA 1936? | A2: No

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. Entity A is a body corporate and its constitution and rules cannot be altered or revoked without the approval of its head. It has perpetual succession, with a common seal capable of holding real and personal property among other things, and with the objects and powers prescribed by its constitution and rules. Entity A is currently the sole unit holder of all issued units in the Unit Trust. The Unit Trust was established by a deed (Trust Deed). The Trustee is the trustee of the Unit Trust and was incorporated with a constitution. The sole shareholder of the Trustee is Entity A. The Trustee as trustee of the Unit Trust acts as a group procurement body for several entities.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 24AM, | Income Tax Assessment Act 1936 section 24AS, | Income Tax Assessment Act 1936 section 24AN, and | Income Tax Assessment Act 1936 section 24AT

Reasons for decision: Summary: The Unit Trust is a STB as it satisfies section 24AS of the ITAA 1936. | Detailed Reasoning - Detailed reasoning: Section 24AM in Division 1AB of the ITAA 1936 provides that the income of a STB is exempt from income tax unless section 24AN of the ITAA 1936 applies to the STB. Section 24AN of the ITAA 1936 provides that the income derived by a STB is not exempt from income tax if, at the time that it is derived, the STB is an excluded STB. In this Division section 24AT of the ITAA 1936 provides a definition of an excluded STB as a STB that: (a) at a particular time, is prescribed as an excluded STB in relation to that time; or (b) is a municipal corporation or other local governing body (within the meaning of section 50-25 of the ITAA 1997); or (c) is a public educational institution to which any of paragraphs 50-55(a) to (c) of the ITAA 1997 applies; or (d) is a public hospital to which any of paragraphs 50-55(a) to (c) of the ITAA 1997applies; or (e) is a superannuation fund. Pursuant to section 24AS of the ITAA 1936, a body is an STB if: (a) it is not a company limited solely by shares; and (b) it is not established by State or Territory legislation; and (c) all the legal and beneficial interests (including, but not limited to, interests as to income, profits, dividends, capital and distributions of capital) in it are held only by one or more government entities; and (d) all the rights or powers (if any) to vote, appoint or dismiss its governing person or body and direct its governing person or body as to the conduct of its affairs are held only by one or more government entities. Section 24AT of the ITAA 1936 defines a government entity to include another STB that is not an excluded STB. Section 24AQ of the ITAA 1936 provides that a body is an STB if: (a) it is established by State or Territory legislation; and (b) it is not a company limited solely by shares; and (c) the legislation gives the power to appoint or dismiss its governing person or body only to one or more government entities. Entity A satisfies the conditions set out in section 24AQ of the ITAA 1936 in that: · It is established by legislation. · It is a body corporate that has not issued shares therefore, not a company limited solely by shares. The legislation gives the power to appoint or dismiss its governing body to its constituent councils that are local governing bodies, and accordingly government entities. Further, Entity A is not an excluded STB in terms of section 24AT of the ITAA 1936 as: · It is not a prescribed STB at any particular time prior to this application. · It is not a municipal corporation or other local governing body (within the meaning of section 50-25 of the ITAA 1997). · It is not a public educational institution to which any of paragraphs 50-55(a) to (c) of the ITAA 1997 applies. · It is not a public hospital to which any of paragraphs 50-55(a) to (c) of the ITAA 1997 applies. · It is not a superannuation fund. As Entity A is a STB because it satisfies the conditions provided for by section 24AQ of the ITAA 1936, and it is not an excluded STB in terms of section 24AT of the ITAA 1936, it is a government entity as defined in section 24AT of the ITAA 1936. The Unit Trust satisfies the conditions of section 24AS of the ITAA 1936 in that: · It is a trust and not a company limited solely by shares. · It was established by a Trust Deed and not by state legislation. All the legal and beneficial interests (including, but not limited to, interests as to income, profits, dividends, capital and distributions of capital) in it are held by Entity A. All the rights or powers (if any) to vote, appoint or dismiss its governing person or body and direct its governing person or body as to the conduct of its affairs are held by Entity A. | Summary: The Unit Trust is not an excluded STB in terms of 24AT of the ITAA 1936. | Detailed Reasoning - Detailed reasoning: The Unit Trust is not an excluded STB in terms of section 24AT of the ITAA 1936 as: · The Unit Trust is not a prescribed STB at any particular time prior to this application. · It is not a municipal corporation or other local governing body (within the meaning of section 50-25 of the ITAA 1997). · It is not a public educational institution to which any of paragraphs 50-55(a) to (c) of the ITAA 1997 apply. · It is not a public hospital to which any of paragraphs 50-55(a) to (c) of the ITAA 1997 apply. · It is not a superannuation fund. | Detailed Reasoning - Conclusion:: The Unit Trust is a STB because it satisfies the conditions set out in section 24AS of the ITAA 1936. Further, the conditions set out in section 24AT of the ITAA 1936 do not apply to the Unit Trust. Therefore, it is not an excluded STB in terms of section 24AT of the ITAA 1936.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Subject: Unit Trust- State Territory Body (STB): This ruling applies to the beneficiaries of the trust and to the trustee and to any future trustees, for as long as the ruling remains current. | Reasons for decision: These reasons for decision accompany the Notice of private ruling for the taxpayer. | While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision.