Document ID: chunk:federal_register_of_legislation:C2025C00029:section:12:p41
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 12 (pt 41/43)
Character Range: 4048429–4051308

235

235‑1  What this Division is about
      This Division is about the tax treatment of particular kinds of financial transactions.

Subdivision 235‑I—Instalment trusts

Guide to Subdivision 235‑I

235‑805  What this Subdivision is about

      An entity that invests in an asset through an instalment warrant, instalment receipt, or other similar arrangement, is treated for most income tax purposes as if it had invested in the asset directly.
      A regulated superannuation fund that invests in an asset through a limited recourse borrowing is treated in the same way.

Table of sections

Operative provisions
235‑810 Object of this Subdivision
235‑815 Application of Subdivision
235‑820 Look‑through treatment for instalment trusts
235‑825 Meaning of instalment trust and instalment trust asset
235‑830 What trusts are covered—instalment trust arrangements
235‑835 Requirement for underlying investments to be listed or widely held
235‑840 What trusts are covered—limited recourse borrowings by regulated superannuation funds
235‑845 Interactions with other provisions

Operative provisions

235‑810  Object of this Subdivision
  The object of this Subdivision is to ensure that, for most income tax purposes, the consequences of ownership of an *instalment trust asset flow to the entity that has the beneficial interest in the asset, instead of to the trustee.

235‑815  Application of Subdivision
 (1) This Subdivision applies to:
 (a) the entity that has the beneficial interest in an *instalment trust asset as the beneficiary of an *instalment trust; and
 (b) the trustee of the instalment trust.
 (2) This Subdivision applies for the purposes of this Act, apart from:
 (a) Part VA of the Income Tax Assessment Act 1936 (which is about tax file numbers); and
 (b) Subdivisions 12‑E, 12‑F and 12‑H in Schedule 1 to the Taxation Administration Act 1953 (which are about PAYG withholding).

Joint investments
 (3) This Subdivision applies in relation to 2 or more entities that hold an interest in a trust as joint tenants, or as tenants in common, in the same way it applies in relation to a single entity that holds such an interest.
Note: Each investor that is treated by this Subdivision as jointly owning an instalment trust asset is treated for CGT purposes as owning a separate asset: see section 108‑7.

235‑820  Look‑through treatment for instalment trusts
 (1) If an entity (the investor) has a beneficial interest in an *instalment trust asset under an *instalment trust, the asset is treated as being the investor's asset (instead of being an asset of the trust).
Example: A dividend in respect of the asset is paid to the trustee. It is treated (but not for the purposes of the PAYG withholding provisions mentioned in paragraph 235‑815(2)(b)) as if it had been paid directly to the investor.
 (2) An act done in relation to an *instalment trust asset of