Document ID: chunk:federal_register_of_legislation:C2019C00124:clause:4_5:p1
Version: federal_register_of_legislation:C2019C00124
Segment Type: clause
Provision Reference: sch 4 cl 5 (pt 1/3)
Character Range: 147517–150271

5  At the end of Division 275
Add:

Subdivision 275‑L—Modification for non‑arm's length income

Guide to Subdivision 275‑L

275‑600  What this Subdivision is about
      The trustee of a managed investment trust in relation to an income year is taxed on amounts related to the managed investment trust's non‑arm's length income for the income year.

Table of sections

Operative provisions
275‑605 Trustee taxed on amount of non‑arm's length income of managed investment trust
275‑610 Non‑arm's length income
275‑615 Commissioner's determination in relation to amount of non‑arm's length income

Operative provisions

275‑605  Trustee taxed on amount of non‑arm's length income of managed investment trust
 (1) Subsections (2), (3) and (4) apply if the Commissioner has made a determination under section 275‑615 that specifies an amount of *non‑arm's length income for a specified *managed investment trust in relation to a specified income year.

Excess amount to be taxed
 (2) The trustee of the *managed investment trust is liable to pay income tax at the rate declared by the Parliament on the amount mentioned in subsection (5).
Note: The rate is set out in subsection 12(10) of the Income Tax Rates Act 1986.

Excess amount to be adjusted
 (3) If the trust is an *AMIT for the income year:
 (a) if paragraph (b) does not apply—treat the trust as having an *over in the income year in which the determination is made, for the specified income year, of a character relating to *ordinary income, or *statutory income, from an *Australian source, equal to the amount mentioned in subsection (5); or
 (b) if the trust already has such an over in the income year in which the determination is made, for the specified income year—increase the amount of that over by the amount mentioned in subsection (5).
 (4) If the trust is not an *AMIT for the income year, reduce the trust's *net income for the income year in which the determination is made by the amount mentioned in subsection (5), to the extent that the net income is attributable to that amount.

Excess amount
 (5) The amount is the excess mentioned in paragraph 275‑610(1)(b) in respect of the *non‑arm's length income, reduced by deductions (if any) that:
 (a) are reflected in:
 (i) if the trust is an *AMIT for the income year—the amounts of its *trust components for the income year (disregarding subsection (3)); or
 (ii) otherwise—its *net income for the income year (disregarding subsection (4)); and
 (b) are attributable only to the amount of non‑arm's length income.

275‑610  Non‑arm's length income
 (1) An amount of *ordinary income or *statutory income is non‑arm's length income of a *managed investment trust if:
 (a) it is derived from a *scheme the parties to which were not