Document ID: chunk:federal_register_of_legislation:C2025C00014:schedule:2f:p1
Version: federal_register_of_legislation:C2025C00014
Segment Type: schedule
Provision Reference: sch 2F (pt 1/79)
Character Range: 2212316–2215090

Schedule 2F—Trust losses and other deductions

Division 265—Overview of Schedule

265‑5  What this Schedule is about

      If there is a change in ownership or control of a trust or an abnormal trading in its units, it:
         • may be prevented from deducting its tax losses of earlier income years; and
         • may have to work out in a special way its net income and tax loss for the income year; and
         • may be prevented from deducting certain amounts in respect of debts incurred in the income year or earlier income years.
      This will not be the case if the trust is an excepted trust. However, if it became one by making a family trust election, a special tax may be payable on certain distributions and other amounts.
      If a trust is involved in a scheme to take advantage of deductions, it may be prevented from making full use of them.

265‑10  Diagram giving overview of Schedule

Division 266—Income tax consequences for fixed trusts of abnormal trading or change in ownership

Subdivision 266‑A—Overview of this Division

266‑5  What this Division is about

      This Division is about the income tax consequences, for various kinds of fixed trusts, of certain events:
         • for an ordinary fixed trust, the event is a change in ownership (subject to a non‑fixed trust exception);
         • for an unlisted widely held trust, the event is an abnormal trading in its units, or the end of an income year, together with a change in ownership;
         • for a listed widely held trust, the event is an abnormal trading in its units, together with a change in ownership and business;
         • for an unlisted very widely held trust or a wholesale widely held trust, the event is an abnormal trading in its units, together with a change in ownership.

266‑10  Diagram giving overview of this Division

Subdivision 266‑B—Effect of change in ownership of fixed trust

266‑15  What this Subdivision is about

      An ordinary fixed trust:
         • cannot deduct a tax loss from an earlier income year; or
         • has to work out its net income and tax loss for the income year in a special way; or
         • cannot deduct certain amounts in respect of debts incurred in the income year or an earlier income year;
      unless there has been continuity of ownership throughout a particular period or an exception relating to holdings by non‑fixed trusts applies.
                  Note: The exceptions mentioned in this section apply differently in relation to designated infrastructure project entities: see sections 415‑25 and 415‑30 of the Income Tax Assessment Act 1997.

266‑20  Diagram giving overview of this Subdivision

266‑25  Fixed trust may be denied tax loss deduction

Type of trust to which this section applies