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INCOME TAX ASSESSMENT ACT 1936 - SECT 102R

Public trading trusts

             (1)  A unit trust is a public trading trust in relation to a relevant year of income if:

                     (a)  where the relevant year of income is the year of income that commenced on 1 July 1985, the year of income commencing on 1 July 1986 or the year of income commencing on 1 July 1987:

                              (i)  the unit trust was established after 19 September 1985;

                             (ii)  the unit trust is a public unit trust in relation to the relevant year of income;

                            (iii)  the unit trust is a trading trust in relation to the relevant year of income;

                            (iv)  either of the following conditions is satisfied:

                                        (A)  the unit trust is a resident unit trust in relation to the relevant year of income;

                                        (B)  the unit trust was a public trading trust in relation to a year of income preceding the relevant year of income; or

                     (b)  where the relevant year of income is the year of income commencing on 1 July 1988 or a subsequent year of income:

                              (i)  the unit trust is a public unit trust in relation to the relevant year of income;

                             (ii)  the unit trust is a trading trust in relation to the relevant year of income;

                            (iii)  either of the following conditions is satisfied:

                                        (A)  the unit trust is a resident unit trust in relation to the relevant year of income;

                                        (B)  the unit trust was a public trading trust in relation to a year of income preceding the relevant year of income.

             (2)  Where:

                     (a)  a unit trust would, but for this subsection, be a unit trust established on or before 19 September 1985;

                     (b)  the unit trust was not a trading trust on 19 September 1985; and

                     (c)  the unit trust became a trading trust on a day after 19 September 1985;

the unit trust shall be taken, for the purposes of this section, to have been established after 19 September 1985.

             (3)  For the purposes of subsection (2), a unit trust is a trading trust on a particular day if, on that day, the trustee:

                     (a)  carries on a trading business; or

                     (b)  controls or is able to control, directly or indirectly, the affairs or operations of another person in respect of the carrying on by that other person of a trading business.

             (4)  Where:

                     (a)  a unit trust would, but for this subsection, be a unit trust established on or before 19 September 1985;

                     (b)  if the year of income in which 19 September 1985 occurred had ended on that date, the unit trust would not have been a public unit trust in relation to that year of income; and

                     (c)  the Commissioner is satisfied that, at no time on or before that date, was it the intention of the trustee of the unit trust that the unit trust would become a public unit trust in relation to a year of income;

the unit trust shall be taken, for the purposes of this section, to have been established after 19 September 1985.

             (5)  In determining whether a unit trust is a public trading trust under this section, disregard any interest that the trust has that is disregarded under subsection 275-10(4A) of the Income Tax Assessment Act 1997 .



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