Document ID: chunk:federal_register_of_legislation:C2005C00508:clause:2_52zzzc:p1
Version: federal_register_of_legislation:C2005C00508
Segment Type: clause
Provision Reference: sch 2 cl 52ZZZC (pt 1/2)
Character Range: 174512–177285

52ZZZC  Disposal of income by company or trust

 (1) If:
 (a) an individual is an attributable stakeholder of a company or trust; and
 (b) the company or trust disposes of ordinary income of the company or trust; and
 (c) if that income had been income of the individual instead of the company or trust, the income would have been ordinary income of the individual; and
 (d) if the ordinary income is income from an asset—the course of conduct that constituted the disposition of the income did not also constitute a disposition of the asset;
Division 7 applies, and is taken to have applied, as if:
 (e) the individual had disposed of ordinary income of the individual; and
 (f) the amount of the disposition referred to in paragraph (e) were equal to the individual's income attribution percentage of the amount of the disposition referred to in paragraph (b).

 (2) Subsection (1) has effect subject to subsection (3).

Commission determinations

 (3) The Commission may, by writing:
 (a) determine that the disposal of specified ordinary income is exempt from subsection (1); or
 (b) determine that subsection (1) has effect, in relation to the disposal of specified ordinary income, as if the reference in paragraph (1)(f) to the individual's income attribution percentage were a reference to such lower percentage as is specified in the determination.

 (4) A determination under subsection (3) has effect accordingly.

 (5) In making a determination under subsection (3), the Commission must comply with any relevant decision‑making principles.

General disposal

 (6) For the purposes of subsection (1), a company or trust disposes of ordinary income of the company or trust if:
 (a) on or after 1 January 2002, the company or trust, or an attributable stakeholder of the company or trust, engages in a course of conduct that directly or indirectly:
 (i) destroys the source of the income; or
 (ii) disposes of the income or the source of the income; or
 (iii) diminishes the income; and
 (b) one of the following subparagraphs is satisfied:
 (i) the company or trust receives no consideration in money or money's worth for the destruction, disposal or diminution;
 (ii) the company or trust receives inadequate consideration in money or money's worth for the destruction, disposal or diminution;
 (iii) the Commission is satisfied that the purpose, or the dominant purpose, of the company, trust or stakeholder in engaging in that course of conduct was to obtain an income support advantage for an attributable stakeholder of the company or trust (who may be the first‑mentioned stakeholder) or for a relative of an attributable stakeholder of the company or trust; and
 (c) in the case of a company—the disposal is not by way of making a distribution of capital