Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p11
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 11/34)
Character Range: 3551954–3554723

entity has acquired or will acquire (whether directly or indirectly) money or property, other than money or property comprising the distribution or the ineligible entity's trust share amount, from:
 (i) the entity making the distribution; or
 (ii) an entity through which the distribution flows indirectly to the ineligible entity; or
 (iii) an *associate of any of those entities (other than the ineligible entity).

207‑126  Entity may be ineligible if distributions do not match trust share amounts
 (1) This section applies to a beneficiary of a trust in relation to an income year if:
 (a) the sum of the distributions:
 (i) made to the beneficiary during the income year by the trustee of the trust; and
 (ii) that relate to the beneficiary's *trust share amount in relation to a *franked distribution made during the income year;
is less than:
 (b) that trust share amount.

Commissioner's power to treat trust share amount as having been distributed during the income year
 (2) Subsection (1) does not apply if the Commissioner, having regard to all the circumstances, considers that it would be reasonable to treat the *trust share amount as having been distributed to the beneficiary in the income year.

207‑128  Reinvestment choice
 (1) If, apart from this section, paragraph 207‑120(2)(a) or (d) or section 207‑124 would apply to an entity (the receiving entity) to whom a *franked distribution is made or *flows indirectly, that paragraph or section is taken not to apply to the receiving entity if:
 (a) instead of receiving the distribution, or the *trust share amount concerned, by a payment of money, the receiving entity chooses to be issued with:
 (i) if the distribution is made to the receiving entity—*shares in the *corporate tax entity making the distribution; or
 (ii) if the distribution flows indirectly to the receiving entity—a fixed interest in the trust in relation to which the trust share amount arises; and
 (b) the choice is genuine and furthers the purpose for which the entity was established; and
 (c) the choice is not made for the purpose, or purposes that include the purpose, of benefiting the corporate tax entity, trust or any of their *associates (other than the receiving entity); and
 (d) any benefit *derived by the corporate tax entity, trust or any of their associates (other than the receiving entity) because of that choice is one which is an ordinary incident of issuing the shares or interests to the receiving entity or of the receiving entity's holding of those shares or interests; and
 (e) the parties that were involved in the *distribution event or *arrangement concerned deal with one another on an *arm's length basis in relation to the event or arrangement.

A vested and indefeasible interest constitutes