Document ID: chunk:federal_register_of_legislation:C2016C00969:section:6:p2
Version: federal_register_of_legislation:C2016C00969
Segment Type: section
Provision Reference: s 6 (pt 2/3)
Character Range: 26725–29267

tax, or part of the trust recoupment tax, is unlikely to be paid; or
 (b) a trust estate ceases to exist at a time when there remains unpaid an amount of trust recoupment tax payable by the trustee on a primary taxable amount that exists in relation to the trustee in relation to a year of income;
a secondary taxable amount shall be taken to exist in relation to the eligible beneficiaries class in relation to the year of income of an amount equal to the amount of the unpaid trust recoupment tax multiplied by 2.22.
 (4) Subject to subsection (5), for the purposes of the application of subsection (1), (2) or (3) in relation to a primary taxable amount, the eligible beneficiaries class includes each person who has derived, or might reasonably be expected to derive, a benefit that would not have been derived, or might reasonably be expected not to have been derived, if the primary trust income in relation to the primary taxable amount had not been derived.
 (5) In subsection (4), a reference to a benefit shall be read as not including a reference to:
 (a) a benefit referred to in paragraph 5(1)(d) derived by a beneficiary to whom paragraph 5(1)(f) applies; and
 (b) a benefit derived by a person (not being a person who at any time after the time when the tax avoidance scheme to which the primary taxable amount relates was entered into was an associate of the trustee of the trust estate in relation to which the primary taxable amount exists) from a transaction the parties to which were dealing with each other at arm's length in relation to the transaction.
 (6) For the purposes of the application of this Act in relation to trust recoupment tax payable or paid on a secondary taxable amount, the eligible beneficiaries class in relation to the secondary taxable amount shall not be taken to include any person who was not included in that class at the time when the notice of assessment in respect of the trust recoupment tax was served.
 (7) For the purposes of this section, a trust estate is a holding trust estate in relation to another trust estate at a particular time if the trustee of the first‑mentioned trust estate has a beneficial interest in the other trust estate at that time.
 (8) For the purposes of subsection (7), where the trustee of a trust estate has a beneficial interest in a second trust estate and the trustee of the second trust estate has a beneficial interest in a third trust estate (including a beneficial interest that the trustee of the second trust estate has in the third trust estate by