Commonwealth Consolidated Acts

TAXATION LAWS AMENDMENT ACT (NO. 5) 2000 - SCHEDULE 3

Income Tax Assessment Act 1936

1   At the end of subsection 102UE(3)

Add:

  "; and (c)   the person is not an ultimate beneficiary in respect of the head trust amount under subsection   ( 4).

2   Paragraph 102UE(4)(c)

Repeal the paragraph, substitute:

  (c)   the head trust amount is not greater than the amount worked out using the formula:

    where:

    lower level trust assessable income means the assessable income (disregarding any amount attributable to the head trust amount) taken into account in working out the net income of the lower level trust for the year of income.

    lower level trust deductions means allowable deductions taken into account in working out the net income of the lower level trust for the year of income.

3   Section   102UH

Repeal the section, substitute:

102UH   UB statement period

    The UB statement period , for the trustee of a trust in relation to a year of income, is the period from the end of the year of income until the end of:

  (a)   the period within which the trustee is required to furnish to the Commissioner the trust's return of income for the year of income; or

  (b)   such further period as the Commissioner allows.

4   Subsection 102UK(1)

Omit "This section", substitute "Subject to subsection   ( 2A), this section".

5   After subsection 102UK(2)

Insert:

Amendment of incorrect statement

  (2A)   If:

  (a)   during the UB statement period in relation to a year of income, the trustee of a closely held trust makes and gives to the Commissioner a statement, that the trustee believes on reasonable grounds is a correct UB statement, about the whole or part of a share of the net income of the closely held trust; and

  (b)   the statement is not a correct UB statement about some or all (the amount subject to the error ) of the whole or the part of the share, with the result that, apart from this subsection, this section applies; and

  (c)   the trustee could not reasonably have foreseen the event that caused the statement not to be a correct UB statement; and

  (d)   either:

  (i)   before any ultimate beneficiary non - disclosure tax becomes due and payable on the amount subject to the error as a result of this section applying; or

  (ii)   before the end of 4 years after any such tax becomes due and payable;

    the trustee advises the Commissioner in writing of any change that is necessary to make the statement a correct UB statement about the whole or part of the amount subject to the error;

this section does not apply, and is taken never to have applied, to the whole or the part of the amount subject to the error.

6   After section   102UR

Insert:

102URA   Request for notice of liability

  (1)   A person or persons may make a written request to the Commissioner to be given a notice under subsection 102UR(1) in respect of specified circumstances in which ultimate beneficiary non - disclosure tax may be payable.

Compliance with request

  (2)   The Commissioner must, subject to subsection   ( 3) of this section, comply with the request.

Further information

  (3)   If the Commissioner considers that the notice cannot be given unless the person or persons give the Commissioner further information, the Commissioner must request the person or persons to give the Commissioner the information.

Failure to give information

  (4)   If the person or persons do not give the information, the Commissioner is not required to comply with the request to give the notice.

7   After section   102US

Insert:

102USA   Recovery of ultimate beneficiary non - disclosure tax from persons providing incorrect information etc. to head trustee

  (1)   This section applies if the requirements in subsections   ( 2) to (4) are satisfied.

Requirement for payment of ultimate beneficiary non - disclosure tax

  (2)   A requirement for this section to apply is that:

  (a)   the trustee of a closely held trust does not make a correct UB statement about the whole or part of a share of the net income of the trust of a year of income during the UB statement period in relation to the year of income; and

  (b)   as a result, the trustee becomes liable, or the persons in the trustee group become jointly and severally liable, under section   102UK to pay ultimate beneficiary non - disclosure tax; and

  (c)   the trustee or any of the persons in the trustee group pays an amount (the recoverable amount ) being some or all of the tax or any general interest charge under section   102UP in relation to the tax.

Requirement for refusal etc. to provide information or for incorrect statement

  (3)   A requirement for this section to apply is that:

  (a)   either:

  (i)   the trustee of the closely held trust was unable to make a correct UB statement about the whole or the part of the share of the net income during the UB statement period because another person (the information source ), when requested to do so, refused or failed to give information to the trustee; or

  (ii)   the trustee of the closely held trust purported to make a correct UB statement about the whole or the part of the share of the net income during the UB statement period, where the statement was not a correct UB statement because it contained incorrect information given to the trustee of the closely held trust by another person (also the information source ), and the trustee honestly believed on reasonable grounds that the information was correct; and

  (b)   the trustee of the closely held trust distributed to the trustee beneficiary an amount representing some or all of the share of the net income without withholding an amount under section   254 in respect of the recoverable amount.

Requirement for person failing to provide information etc. to be an ultimate beneficiary or trustee of interposed trust etc.

  (4)   A requirement for this section to apply is that the information source is:

  (a)   an ultimate beneficiary; or

  (b)   the trustee beneficiary; or

  (c)   the trustee of an interposed trust, or a partner in an interposed partnership, through which an ultimate beneficiary is presently entitled to some or all of the head trust amount concerned.

Consequences of section applying

  (5)   If this section applies, the trustee or the person in the trustee group mentioned in paragraph   ( 2)(c) may, in a court of competent jurisdiction, sue for the recoverable amount and recover it from the information source, or if there is more than one such person, those persons jointly and severally.

8   At the end of section   254

Add:

  (3)   In paragraphs   ( 1)(d) and (e), and in its first occurrence in paragraph   ( 1)(h), tax includes, in addition to the things mentioned in subsection   ( 2):

  (a)   ultimate beneficiary non - disclosure tax within the meaning of Division   6D of Part   III; and

  (b)   general interest charge payable under section   102UP in respect of such tax.

9   Application

(1)   The amendments made by this Schedule have the same application as they would if they had been part of Division   6D of Part   III of the Income Tax Assessment Act 1936 when that Division was originally inserted in that Act by item   2 of Schedule   1 to the A New Tax System (Closely Held Trusts) Act 1999 .

(2)   To avoid doubt, the Commissioner may, at any time after the commencement of this Schedule, under paragraph 102UH(b) of the Income Tax Assessment Act 1936 as amended by this Schedule, allow a further period in respect of a year of income that ended before the commencement of this Schedule.

10   Transitional

The references in paragraphs 102USA(2)(c) and 254(3)(b) of the Income Tax Assessment Act 1936 as inserted by this Schedule to general interest charge under section   102UP include a reference to:

  (a)   general interest charge under item   93 of Schedule   2 to the A New Tax System (Pay As You Go) Act 1999 ; and

Note:   Item   93 applied a general interest charge to amounts that became payable before 1   July 1999.

  (b)   additional tax under section   102UP of the Income Tax Assessment Act 1936 as in force before the commencement of item   92 of Schedule   2 to the A New Tax System (Pay As You Go) Act 1999 .

Note:   Item   92 had the effect that additional tax under section   102UP continued to apply to amounts that became payable before 1   July 1999.

Notes to the Taxation Laws Amendment Act (No. 5) 2000

Note 1

The Taxation Laws Amendment Act (No.   5) 2000 as shown in this compilation comprises Act No.   43, 2000 amended as indicated in the Tables below.

Table of Acts

Table of Amendments