Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1936 - SECT 368

  (1)   A beneficiary in a trust holds a direct attribution account interest in the trust at a particular time equal to:

  (a)   the percentage of the income of the trust represented by the share of the income to which the beneficiary is entitled, or that the beneficiary is entitled to acquire; or

  (b)   the percentage of the corpus of the trust represented by the share of the corpus to which the beneficiary is entitled, or that the beneficiary is entitled to acquire;

or, if those percentages differ, the greater of those percentages.

  (2)   For the purposes of the application of subsection   (1) to a trust:

  (a)   the percentage of the income of the trust represented by the share of the income to which the beneficiary is entitled, or that the beneficiary is entitled to acquire; or

  (b)   the percentage of the corpus of the trust represented by the share of the corpus to which the beneficiary is entitled, or that the beneficiary is entitled to acquire;

at a particular time (in this subsection called the test time ) in an accounting period of the trust, is to be worked out by:

  (c)   ascertaining whichever of the following is applicable:

  (i)   the income of the trust for the accounting period;

  (ii)   the corpus of the trust as at the end of the accounting period; and

  (d)   assuming that the share to which the entity is entitled, or that the entity is entitled to acquire, at the test time was the same at all other times during the accounting period; and

  (e)   ascertaining the percentage concerned:

  (i)   at the end of the accounting period instead of at the test time; and

  (ii)   on that assumption.

  (3)   Each entity that is an eligible transferor in relation to a trust at a particular time holds a direct attribution account interest in the trust at that time equal to:

  (a)   if paragraph   (b) does not apply--100%; or

  (b)   if, because there are 2 or more eligible transferors in relation to the trust, the Commissioner reduces an attribution percentage under subsection   362(3) or (4) or subsection   362(5) applies--such lower percentage as the Commissioner considers reasonable in the circumstances.

  (4)   An entity that holds a direct attribution account interest in a trust at a particular time because of subsection   (3) is not taken to hold any direct attribution account interest in the trust at that particular time because of subsection   (1).