(1) Where, at any time during a year of income, an amount, being property of a trust estate, is paid to, or applied for the benefit of, a beneficiary of the trust estate who was a resident at any time during the year of income, the assessable income of the beneficiary of the year of income shall, subject to subsection (2), include that amount.
(2) The amount that, but for this subsection, would be included in the assessable income of a beneficiary of a trust estate under subsection (1) by reason that an amount, being property of the trust estate, was paid to, or applied for the benefit of, the beneficiary shall be reduced by so much (if any) of the amount, as represents:
(a) corpus of the trust estate (except to the extent to which it is attributable to amounts derived by the trust estate that, if they had been derived by a taxpayer being a resident, would have been included in the assessable income of that taxpayer of a year of income);
(b) an amount that, if it had been derived by a taxpayer being a resident, would not have been included in the assessable income of that taxpayer of a year of income;
(ba) an amount that is non-assessable non-exempt income of the beneficiary because of section 802- 17 of the Income Tax Assessment Act 1997 ;
(c) an amount:
(i) that is or has been included in the assessable income of the beneficiary in pursuance of section 97; or
(ii) in respect of which the trustee of the trust estate is or has been assessed and liable to pay tax in pursuance of section 98, 99 or 99A; or
(iii) that is reasonably attributable to a part of the net income of another trust estate in respect of which the trustee of the other trust estate is assessed and is liable to pay tax under subsection 98(4);
(d) an amount that is or has been included in the assessable income of any taxpayer (other than a company) under section 102AAZD; or
(e) if the beneficiary is a company--an amount that is or has been included in the assessable income of the beneficiary under section 102AAZD.
(2A) An amount that is not included in a beneficiary's assessable income because of paragraph (2)(d) or (e) is not assessable income and is not exempt income.
(3) In paragraphs (2)(d) and (e):
"company" means a company other than a company in the capacity of a trustee.