Private ruling: Loan interest
Date of advice: 30 July 2021
Published: November 2021
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will Z Trust and X Trust be "trading trusts" for the purposes of Division 6C of the Income Tax Assessment Act 1936 ? | A1: No | Q2: In the event that Z Trust qualifies as a withholding managed investment trust (withholding MIT), will the distributions by Z Trust attributable to the loan interest be "fund payments" for the purposes of section 12-405 of Schedule 1 of the Taxation Administration Act 1953 that are not attributable to "non-concessional MIT income" for the purpose of section 12-435 of Schedule 1 of the Taxation Administration Act 1953 ? | A2: Yes | Q3: Will the accruals/realisation methods under the Taxation of Financial Arrangements (TOFA) regime as set out in Subdivision 230-B of the Income Tax Assessment Act 1997 apply to the loan interest derived by X Trust from the Loans? Answe r No

Relevant facts and circumstances: Z Trust (an Australian unit trust which hold 100% of the units in X Trust) applied for a private binding ruling in respect of loans held by X Trust (an Australian unit trust).

Relevant legislative provisions: Income Tax Assessment Act 1936 Division 6C | Income Tax Assessment Act 1997 Subdivision 230-B | Taxation Administration Act 1953 Section 12-405 | Taxation Administration Act 1953 section 12-435


This ruling applies for the following periods: