Document ID: chunk:federal_register_of_legislation:C2019C00124:clause:5_75:p1
Version: federal_register_of_legislation:C2019C00124
Segment Type: clause
Provision Reference: sch 5 cl 75 (pt 1/2)
Character Range: 165566–168043

75  Transitional rule for 20% tracing requirement and repeal of Division 6B—imputation
(1) This item applies if at a time (the cessation time), on or after the commencement of this Schedule, either:
 (a) section 102K of the Income Tax Assessment Act 1936 ceases to apply to the trustee of a trust because of the repeal of that section by Part 2 of this Schedule; or
 (b) section 102S of that Act ceases to apply to the trustee of a trust because of the amendment made by Part 1 of this Schedule.
(2) Subitems (3) and (3A) apply if:
 (a) an event happens in respect of the trust that is described in:
 (i) the table in subsection 205‑15(1) of the Income Tax Assessment Act 1997; or
 (ii) the table in subsection 205‑30(1) of that Act; and
 (b) the event happens on or after the cessation time but before 1 July 2019; and
 (c) the event is:
 (i) the trust paying income tax for an income year starting before 1 July 2016; or
 (ii) the trust paying a PAYG instalment in respect of income tax for an income year starting before 1 July 2016; or
 (iii) the trust receiving a refund of income tax for an income year starting before 1 July 2016; or
 (iv) the trust franking a distribution; or
 (v) the trust ceasing to be a franking entity.
(2A) However, subparagraph (2)(c)(v) does not apply unless the trust's franking account is in surplus immediately before the trust ceases to be a franking entity.
(3) For the purposes of determining whether a franking credit or franking debit arises in the trust's franking account as a result of the event:
 (a) treat the trust as a corporate tax entity at the time the event happens; and
 (b) treat the trust as satisfying the residency requirement in section 205‑25 of the Income Tax Assessment Act 1997 for the income year in which the event happens.
(3A) If the event is an event described in item 4 of the table in subsection 205‑30(1) of the Income Tax Assessment Act 1997, treat the event as happening on 1 July 2019.
(4) Subitems (5) and (6) apply if:
 (a) the trust makes a distribution on or after the cessation time but before 1 July 2019; and
 (b) the trust's franking account is in surplus just before the trust makes the distribution; and
 (c) the distribution is not made out of income derived in relation to the 2016‑17 income year or a later income year.
(5) For the purposes of determining whether the trust franks the distribution as a result of the event:
 (a) treat the trust as a corporate tax entity at the time it makes