Taxation Determination TD 93/186







This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953 , is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, this Determination applies to years commencing both before and after its date of issue. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20). | 1. Yes. Where a beneficiary derives other income and is required to include the trust distribution by virtue of subsection 100(1), both the trustee (section 160AQY) and the beneficiary (section 160AQX) receive the imputation rebate. However, the benefit is not actually allowed twice. | 2. Under subsection 100(2), a beneficiary who is under a legal disability receives a credit for the tax paid or payable by the trustee on that beneficiary's share of the income entitlement. To calculate this credit the gross tax payable by the trustee under subsection 98(1) is reduced by the beneficiary's share of the trust's imputation rebate. This reduced amount is the credit allowed under subsection 100(2) in the beneficiary's assessment. | The ABC Trust would be assessed under subsection 98(1) on a taxable income of $5,000. The tax assessed would be:- | The beneficiary "X" would be assessed as-follows:- | Franked dividend, s44(1) $3,050 | Imputation amount, s160AQT(1) $1,950 | Trust distribution, s100(1) | Imputation amount $1,950 $5,000 | Tax Payable on $5,000 @ 47% $2,350 | Tax payable on $7,000 @ 47% $3,290 | Imputation rebate, s160AQY $1,950 | Imputation rebate, s160AQX $1,950 | Tax payable by trustee, s98(1) $400 | Section 100(2) credit $400 $2,350 | Net Tax payable by Beneficiary $940 | Commissioner of Taxation 16/9/93 | Previously issued as Draft TD 93/D152


Related rulings: TD 92/159
Legislative references: ITAA 25(1) ITAA 44(1) ITAA 98(1) ITAA 100 ITAA 160AQT(1) ITAA 160AQX ITAA 160AQY
Subject references: beneficiary franked dividend imputation system