Document ID: chunk:federal_register_of_legislation:C2007A00079:clause:3_2:p1
Version: federal_register_of_legislation:C2007A00079
Segment Type: clause
Provision Reference: sch 3 cl 2 (pt 1/2)
Character Range: 28057–30558

2  At the end of Subdivision 115‑C
Add:

115‑230  Assessing capital gains of resident testamentary trusts

Purpose

 (1) The purpose of this section is to allow a trustee of a resident testamentary trust to make a choice that has the effect that the trustee will be assessed on *capital gains of the trust in situations where:
 (a) the gains would otherwise form part of a share of the net income of the trust estate that would be included in the assessable income of a beneficiary who could not benefit from them; or
 (b) the trustee would otherwise be liable to tax on the gains on behalf of such a beneficiary under section 98 of the Income Tax Assessment Act 1936.

Trusts for which choice can be made

 (2) A trustee can only make a choice under this section in relation to a trust estate:
 (a) that results from:
 (i) a will, a codicil or an order of a court that varied or modified the provisions of a will or a codicil; or
 (ii) an intestacy or an order of a court that varied or modified the application, in relation to the estate of a deceased person, of the provisions of the law relating to the distribution of the estates of persons who die intestate; and
 (b) that is, in the income year in respect of which the choice is made, a resident trust estate within the meaning of Division 6 of Part III of the Income Tax Assessment Act 1936.

Circumstances in which choice can be made

 (3) If:
 (a) apart from this section:
 (i) a share of the net income of a trust estate that is attributable to *capital gains would be included in the assessable income of a beneficiary for an income year under section 97 of the Income Tax Assessment Act 1936; or
 (ii) a trustee would, on behalf of a beneficiary, be assessed and liable to pay tax for an income year under section 98 of the Income Tax Assessment Act 1936 in respect of a share of the net income of a trust estate that is attributable to capital gains; and
 (b) the beneficiary does not have a vested and indefeasible interest in trust property representing that share; and
 (c) trust property representing that share has not been paid to or applied for the benefit of the beneficiary;
the trustee may, no later than the deadline in subsection (5), make a choice that subsection (4) applies in respect of the beneficiary's share.

Consequences if trustee makes choice

 (4) These are the consequences if the trustee makes a choice that this subsection applies in respect of a beneficiary's share:
 (a) for the purposes of sections 97,