Commonwealth Consolidated Acts Commonwealth Consolidated ActsIncome Tax Assessment Act 1936
1 After Division 4A of Part VA
Insert:
Division 4B -- Quotation of tax file numbers in connection with certain closely held trusts
This Division applies to both the trustee of a trust and to a beneficiary of the trust, if:
(a) paragraph 12 - 175(1)(c) in Schedule 1 to the Taxation Administration Act 1953 applies to the trust; and
Note: That paragraph applies to certain closely held trusts.
(b) paragraph 12 - 175(1)(d) in that Schedule applies to the beneficiary.
202DO Quotation of tax file numbers
(1) The beneficiary may quote the beneficiary's tax file number to the trustee.
(2) The beneficiary quotes the beneficiary's tax file number to the trustee if the beneficiary, or another person acting for the beneficiary, informs the trustee of the number in a manner approved by the Commissioner.
202DP Trustee must report quoted tax file numbers
(1) The trustee must report the beneficiary's tax file number to the Commissioner, in the approved form, if:
(a) the beneficiary quotes the beneficiary's tax file number to the trustee during a quarter (within the meaning of the Income Tax Assessment Act 1997 ); and
(b) the beneficiary has not quoted the beneficiary's tax file number to the trustee in connection with an investment to which this Part applies; and
(c) the trustee has not reported, and is not required to report, the beneficiary's tax file number to the Commissioner under Division 6D of Part III of this Act (about trustee beneficiary non - disclosure tax).
(2) The trustee must give the report to the Commissioner within:
(a) one month after the end of the quarter to which it relates; or
(b) within such further time as the Commissioner allows.
(3) The Commissioner may, by notice in writing given to the trustee, inform the trustee that the period specified in the notice (being a period greater than 3 months) is to be the trustee's reporting period for the purposes of this section. If the Commissioner does so, a reference in this section to a quarter is taken to be a reference to the period specified in the notice.
(4) For the purposes of this section, disregard subsection 202DR(3).
Note: Refusal or failure to report to the Commissioner as required by this section is an offence under section 8C of the Taxation Administration Act 1953 .
202DR Effect of incorrect quotation of tax file number
Commissioner may notify trustee of correct tax file number
(1) If the Commissioner is satisfied:
(a) that the tax file number quoted to the trustee:
(i) has been cancelled or withdrawn since it was quoted; or
(ii) is otherwise wrong; and
(b) that the beneficiary has a tax file number;
the Commissioner may give the trustee notice in writing of the beneficiary's correct tax file number.
(2) The notice give under subsection ( 1) is taken to have taken effect on the day on which the cancelled or withdrawn tax file number was quoted to the trustee as mentioned in paragraph ( 1)(a).
(3) On and from the day on which the notice given under subsection ( 1) took effect, the beneficiary is taken to have quoted the beneficiary's correct tax file number to the trustee.
Commissioner may notify trustee if beneficiary does not have a tax file number etc.
(4) If:
(a) the Commissioner is satisfied that the tax file number quoted to the trustee:
(i) has been cancelled or withdrawn since it was quoted; or
(ii) is for any other reason not the beneficiary's tax file number; and
(b) the Commissioner is not satisfied that the beneficiary has a tax file number;
the Commissioner must give the trustee written notice accordingly.
(5) The Commissioner must give the beneficiary a copy of the notice given under subsection ( 4), together with a written statement of the reasons for the decision to give the notice.
(6) The notice given under subsection ( 4) takes effect on the day specified in the notice, being a day not earlier than the day on which the copy of the notice is given to the beneficiary.
(7) On and from the day on which the notice given under subsection ( 4) takes effect, the beneficiary is taken not to have quoted the beneficiary's tax file number to the trustee.
Note: The trustee may be required to withhold an amount from a payment to the beneficiary if the beneficiary has not quoted the beneficiary's tax file number to the trustee at the time the payment is made: see sections 12 - 175 and 12 - 180 in Schedule 1 to the Taxation Administration Act 1953 .
As such, the trustee may be required to withhold if a notice under subsection ( 4) of this section is in effect on the day on which the payment is made.
2 After paragraph 202F(1)(da)
Insert:
(db) a decision to give a notice under subsection 202DR(4);
Taxation Administration Act 1953
3 Subsection 10 - 5(1) in Schedule 1 (after table item 14)
Insert:
14A | A trustee of a closely held trust distributing an amount from the trust income to a beneficiary, where the beneficiary does not quote its tax file number | 12 - 175 |
14B | A beneficiary of a closely held trust becoming presently entitled to income of the trust, where the beneficiary does not quote its tax file number | 12 - 180 |
4 Subsection 12 - 5(2) in Schedule 1 (table item 5, column headed "In priority to:")
Before "section", insert "section 12 - 175 or 12 - 180 (Payment of income of closely held trust where TFN not quoted) or".
5 After section 12 - 170 in Schedule 1
Insert:
Payment of income of closely held trust where TFN not quoted
12 - 175 Trustee distributes income of closely held trust
Scope
(1) This section applies if:
(a) the trustee of a trust makes a distribution to a beneficiary of the trust at a time (the distribution time ) during an income year of the trust; and
(b) some or all of the distribution is from the * ordinary income or * statutory income of the trust; and
(c) the trust is:
(i) a resident trust estate (within the meaning of subsection 95(2) of the Income Tax Assessment Act 1936 ) in relation to the income year; and
(ii) a closely held trust (within the meaning of section 102UC of that Act, disregarding paragraphs ( c), (d) and (e) of the definition of excluded trust in subsection ( 4) of that section); and
(iii) not prescribed by the regulations for the purposes of this subparagraph; and
(d) the beneficiary is:
(i) an Australian resident; and
(ii) not an * exempt entity; and
(iii) not under a legal disability for the purposes of section 98 of that Act.
Trustee must withhold
(2) The trustee must withhold an amount from the distribution, if:
(a) the beneficiary did not * quote the beneficiary's * tax file number to the trustee before the distribution time; and
(b) the trustee is not liable to pay tax under section 98 of the Income Tax Assessment Act 1936 in connection with the distribution; and
(c) the trustee is not required to make a correct TB statement under Division 6D of Part III of that Act (about trustee beneficiary non - disclosure tax) in connection with the distribution; and
(d) family trust distribution tax is not payable under Schedule 2F to that Act in connection with the distribution.
Note 1: If the trust is a unit trust, the trustee may be required to withhold under section 12 - 140 in priority to this section: see section 12 - 5.
Note 2: The trustee commits an offence if the trustee fails to withhold an amount as required by this section: see section 16 - 25.
Application of rest of Part
(3) If the distribution is not a payment, this Part applies as if the trustee paid the amount of the distribution to the beneficiary at the distribution time.
Trust income of earlier income years
(4) Subsections ( 2) and (3) do not apply to the distribution, to the extent that:
(a) the beneficiary is presently entitled, for the purposes of Division 6 of Part III of the Income Tax Assessment Act 1936 , to a share of the income of the trust of an earlier income year; and
(b) the distribution is a distribution of some or all of that share.
Note: The trustee may have been required to withhold from that share under section 12 - 180.
12 - 180 Beneficiary becomes presently entitled to income of closely held trust
Scope
(1) This section applies if:
(a) at the end of an income year of a trust, a beneficiary of the trust is presently entitled, for the purposes of Division 6 of Part III of the Income Tax Assessment Act 1936 , to a share of the income of the trust of that year; and
(b) paragraph 12 - 175(1)(c) in this Schedule applies to the trustee of the trust; and
(c) paragraph 12 - 175(1)(d) applies to the beneficiary.
Trustee must withhold
(2) The trustee must withhold an amount from that share of the * net income of the trust, if:
(a) the beneficiary did not * quote the beneficiary's * tax file number to the trustee before the end of the year; and
(b) the trustee is not liable to pay tax in respect of that share under section 98 of the Income Tax Assessment Act 1936 ; and
(c) the trustee is not required to make a correct TB statement about that share under Division 6D of Part III of that Act (about trustee beneficiary non - disclosure tax); and
(d) family trust distribution tax is not payable on that share of the income of the trust under Schedule 2F to that Act.
Note 1: If the trust is a unit trust, the trustee may be required to withhold under section 12 - 145 in priority to this section: see section 12 - 5.
Note 2: The trustee commits an offence if the trustee fails to withhold an amount as required by this section: see section 16 - 25.
Application of rest of Part
(3) This Part (other than section 12 - 175) applies as if the trustee had paid that share of the * net income of the trust to the beneficiary at the end of the income year.
Entitlements already paid
(4) Subsections ( 2) and (3) do not apply to that share of the * net income of the trust to the extent that the trustee distributed any of that share to the beneficiary during the income year.
Note: The trustee may have been required to withhold from that distribution under section 12 - 175.
Trusts that end during the year
(5) This section applies as if each reference to the end of an income year were a reference to the time occurring just before the trust ends, if the trust ends during the income year.
12 - 185 Exception for payments below thresholds set by regulations
(1) Section 12 - 175 or 12 - 180 does not require an amount to be withheld if the payment (including the payment mentioned in subsection 12 - 180(3)) is less than the amount worked out under the regulations.
(2) Regulations made for the purposes of this section may deal differently with different payments.
6 At the end of subsection 12 - 190(5) in Schedule 1
Add:
; or (d) is covered by section 12 - 175 or 12 - 180 (Payment of income of closely held trust where TFN not quoted); or
(e) would be covered by section 12 - 175 or 12 - 180 if the other entity had not quoted as mentioned in paragraph 12 - 175(2)(a) or 12 - 180(2)(a); or
(f) would be covered by section 12 - 175 or 12 - 180 apart from section 12 - 185 (which is an exception to sections 12 - 175 and 12 - 180).
7 Subsection 15 - 15(1) in Schedule 1
Omit "or 12 - 145", substitute ", 12 - 145, 12 - 175 or 12 - 180".
8 Subsection 15 - 15(1) in Schedule 1 (note)
Repeal the note, substitute:
Note 1: Section 12 - 140 is about a payment arising from an investment where the recipient does not quote its tax file number (or, in some cases, its ABN).
Note 2: Sections 12 - 175 and 12 - 180 are about a payment of the income of a closely held trust to a beneficiary, where the beneficiary does not quote the beneficiary's tax file number.
Note 3: Section 12 - 145 is about an investor becoming presently entitled to income of a unit trust.
Note 4: Subdivision 12 - H is about distributions of managed investment trust income.
9 Section 16 - 5 in Schedule 1 (after note 1)
Insert:
Note 1A: A trustee of a closely held trust is required to withhold an amount under section 12 - 180 when a beneficiary is presently entitled to unpaid income of the trust.
10 Subsections 16 - 75(1) to (4) in Schedule 1
After "Division 12", insert "(other than section 12 - 175 or 12 - 180)".
11 At the end of section 16 - 75 in Schedule 1
Add:
Payment of income of closely held trust
(5) A trustee must pay to the Commissioner an amount the trustee withholds under section 12 - 175 or 12 - 180 from a payment made during an income year. The trustee must do so:
(a) by the end of the 28th day of the next month following the day by which the trustee was required to give to the Commissioner a report under subsection 16 - 152(1) for the income year; or
(b) within a longer period allowed by the Commissioner.
12 After section 16 - 150 in Schedule 1
Insert:
16 - 152 Annual reports--Withholding payments covered by section 12 - 175
Reports about withholding payments
(1) A trustee must give a report to the Commissioner in the * approved form if the trustee made any * withholding payments covered by section 12 - 175 or 12 - 180 (about payments from the income of certain closely held trusts) during an income year.
(2) The trustee must give the report under subsection ( 1) to the Commissioner:
(a) not later than 3 months after the end of the income year; or
(b) within such further period (if any) as the Commissioner allows.
Reports about trust distributions
(3) A trustee must give a report to the Commissioner in the * approved form if the trustee would be taken to have made any * withholding payments covered by section 12 - 175 or 12 - 180 during an income year if the relevant beneficiary had not * quoted the beneficiary's * tax file number as mentioned in paragraph 12 - 175(2)(a) or 12 - 180(2)(a).
Note: The effect of subsection ( 3) is that the trustee must report amounts distributed to beneficiaries even if the trustee was not required to withhold from those distributions.
(4) The trustee must give the report under subsection ( 3) to the Commissioner:
(a) by the end of the day on which the trustee lodges the trust's * income tax return for the income year; or
(b) within such further period (if any) as the Commissioner allows.
Miscellaneous
(5) Subsections 16 - 153(5), (6) and (7) apply to this section in the same way as they apply to section 16 - 153.
13 Section 16 - 153 in Schedule 1 (heading)
Repeal the heading, substitute:
16 - 153 Annual reports--other payments
14 Paragraph 16 - 155(1)(a) in Schedule 1
After "12 - 85,", insert "12 - 175, 12 - 180,".
15 After section 16 - 155 in Schedule 1
Insert:
16 - 156 Annual payment summary for sections 12 - 175 and 12 - 180
(1) A trustee must give a * payment summary to a beneficiary of the trust, if the trustee made any * withholding payments covered by section 12 - 175 or 12 - 180 to the beneficiary during the income year.
(2) The * payment summary:
(a) must cover each of the * withholding payments mentioned in subsection ( 1); and
(b) may be in electronic form; and
(c) must be given:
(i) not later than 14 days after the day by which the trustee was required to give the Commissioner a report under subsection 16 - 152(1) for the income year; or
(ii) within a longer period allowed by the Commissioner.
16 Subsection 16 - 170(1) in Schedule 1
Before "Subdivision 12 - H", insert "section 12 - 175 or 12 - 180 or".
17 After subsection 16 - 170(1) in Schedule 1
Insert:
(1AAA) A payment summary relating to section 12 - 175 or 12 - 180 is a statement that:
(a) names the trustee and the beneficiary; and
(b) states the total of the * withholding payments (if any) that it covers, and the total of the * amounts withheld by the trustee from those withholding payments; and
(c) specifies the income year of the trust to which it relates; and
(d) is in the * approved form.
18 Subsection 16 - 170(3) in Schedule 1
After "section 16 - 155,", insert "16 - 156,".
19 Subsection 16 - 170(4) in Schedule 1
After " subsection ( 1),", insert "(1AAA),".
20 Subsection 16 - 175(1) in Schedule 1
After "section 16 - 155,", insert "16 - 156,".
21 Subsection 16 - 175(1) in Schedule 1
After "subsection 16 - 170(1),", insert "(1AAA),".
22 Subparagraph 18 - 65(3)(d)(iv) in Schedule 1
Omit "and".
23 At the end of paragraph 18 - 65(3)(d) in Schedule 1
Add:
(v) section 12 - 175 or 12 - 180 (Payment of income of closely held trust where TFN not quoted); and
24 Application provision
(1) Subject to subitem ( 2), the amendments made by this Schedule apply to income of a trust of an income year starting on or after 1 July 2010.
(2) Subsection 12 - 175(4) in Schedule 1 to the Taxation Administration Act 1953 , inserted by this Schedule, applies to income of a trust of any income year.
25 Application provision--tax file number reporting
Section 202DP of the Income Tax Assessment Act 1936 , inserted by this Act, applies to a quarter in relation to a trust if the quarter commences during an income year of the trust starting on or after 1 July 2010.
Part 2 -- Amendments contingent on the Tax Laws Amendment (2010 Measures No. 1) Act 2010
Income Tax Assessment Act 1997
26 Subsection 995 - 1(1) (at the end of the definition of quote )
Add:
; (c) quote a tax file number to a trustee: the beneficiary of a trust quotes the beneficiary's tax file number to the trustee of the trust if:
(i) Division 4B of Part VA of the Income Tax Assessment Act 1936 applies to the trustee and to the beneficiary; and
(ii) the beneficiary is taken, for the purposes of that Part, to have quoted the beneficiary's tax file number to the trustee.
27 Subsection 995 - 1(1) (definition of quoted )
Repeal the definition, substitute:
"quoted" :
(a) an entity has quoted its * tax file number in connection with a * Part VA investment if the entity is taken, for the purposes of Part VA of the Income Tax Assessment Act 1936 , to have quoted its tax file number in connection with the investment; and
(b) the beneficiary of a trust has quoted the beneficiary's tax file number to the trustee of the trust if:
(i) Division 4B of Part VA of the Income Tax Assessment Act 1936 applies to the trustee and to the beneficiary; and
(ii) the beneficiary is taken, for the purposes of that Part, to have quoted the beneficiary's tax file number to the trustee.