Document ID: chunk:federal_register_of_legislation:C2008A00032:clause:1_3:p2
Version: federal_register_of_legislation:C2008A00032
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 2/4)
Character Range: 15933–18596

at the time the trustee makes the first *fund payment in relation to the income year, the conditions in table items 1 and 2 in subsection (1) are satisfied for the trust; and
 (b) the trust was a *managed investment trust in relation to the previous income year otherwise than because of subsection (4).

12‑405  Meaning of fund payment

 (1) The object of this section is to ensure that the total of the *fund payments that the trustee of a trust makes in relation to an income year equals, as nearly as practicable, the net income of the trust for the income year, disregarding these amounts (excluded amounts):
 (a) a dividend (as defined in Division 11A of Part III of the Income Tax Assessment Act 1936) that is subject to, or exempted from, a requirement to withhold under Subdivision 12‑F;
 (b) interest (as so defined) that is subject to, or exempted from, such a requirement;
 (c) a *royalty that is subject to, or exempted from, such a requirement;
 (d) a *capital gain or *capital loss from a *CGT event that happens in relation to a *CGT asset that is not *taxable Australian property;
 (e) amounts that are not from an *Australian source;
and disregarding deductions relating to excluded amounts.

 (2) Work out as follows how much of a payment (the actual payment) made by the trustee of a trust in relation to an income year is a fund payment in relation to that year:

      Method statement
           Step 1. Reduce the actual payment by so much of it that is attributable to excluded amounts.
           Step 2. Work out what it is reasonable to expect will be the *net income of the trust for the income year:

                (a) disregarding excluded amounts, expected excluded amounts and deductions relating to those amounts; and
                (b) on the basis that a *capital gain from *taxable Australian property of the trust that was or would be reduced under step 3 of the method statement in subsection 102‑5(1) of the Income Tax Assessment Act 1997 were double the amount it actually is.

           Step 3. The fund payment is so much of the step 2 amount as is reasonable having regard to:

                (a) the object of this section; and
                (b) the step 1 amount; and
                (c) the amounts of any earlier fund payments made by the trustee in relation to the income year; and
                (d) the expected amounts of any later fund payments the trustee expects to make in relation to the income year.
 (3) The expected *net income of the trust and the expected amounts of future *fund payments are to be worked out on the basis of the trustee's knowledge when the actual payment is made.

 (4)