Commonwealth Consolidated Acts Commonwealth Consolidated Acts16. After section 102L of the Principal Act the following Division is
"Division 6C - Income of Certain Public Trading Trusts
"102M. In this Division, unless the contrary intention appears - 'eligible
investment business' means either or both of -
(a) investing in land for the purpose, or primarily for the purpose,
(b) investing or trading in any or all of the following:
(i) unsecured loans (including deposits with a bank,
building society or other financial institution);
(ii) bonds, debentures, stock or other securities;
(v) a right or option in respect of such a loan, security,
'eligible policy' has the same meaning as in section 110;
(a) a body or association to which paragraph 23 (d), (e), (ea),
(eb), (ec), (f), (g), (h), (i) or (x) applies;
(b) the trustee of an exempt life assurance fund or of a fund to
which paragraph 23 (j), (jaa) or (ja) or section 23F, 23FA
(c) a person or body that, by virtue of a provision of an Act
other than this Act, is not liable to income tax; or
(d) a government, or an authority of a government, that is not
'exempt life assurance fund' means a fund maintained by a life assurance
company solely in respect of a class of life assurance business that consists
of business of, or in relation to, the issuing of, or the undertaking of
liability under, eligible policies;
'land' includes an interest in land;
'life assurance business' has the same meaning as in section 110;
'life assurance company' has the same meaning as in section 110;
'net income', in relation to a public trading trust, means the total
assessable income of the trust calculated under this Act as if the trustee
were a taxpayer in respect of that income and were a resident, less all
'prescribed trust estate' means a trust estate that is, or has been, a public
trading trust in relation to any year of income;
'property' includes a chose in action and also includes any estate, interest,
right or power, whether at law or in equity, in or over property;
'relevant year of income' means the year of income that commenced on 1 July
1985 or a subsequent year of income;
'trading business' means a business that does not consist wholly of eligible
'trustee', in relation to a fund referred to in paragraph (b) of the
definition of 'exempt entity', means the person in whom the assets of the fund
are vested, whether or not as trustee;
'unit', in relation to a prescribed trust estate, includes a beneficial
interest, however described, in any of the income or property of the trust
'unitholder', in relation to a prescribed trust estate, means the holder of a
unit or units in the prescribed trust estate;
(a) any distribution made by the trustee of a prescribed trust
estate, whether in money or in other property, to a unitholder;
(b) any amount credited by the trustee of a prescribed trust
estate to a unitholder as a unitholder,
(c) money paid or credited, or property distributed, by the
trustee of a prescribed trust estate to the extent to which the
money or property is attributable to profits arising during a
year of income in relation to which the prescribed trust estate
was not a public trading trust; or
(d) money paid or credited, or property distributed, by the
trustee of a prescribed trust estate in respect of the
cancellation, extinguishment or redemption of a unit to the extent to which -
(i) the money paid or credited or the property distributed
represents money paid to, or property transferred to,
the trustee for the purpose of the creation or issue of
(ii) the amount of the money paid or credited or the
value of the property distributed, as the case may be,
does not exceed the amount of the money paid to the trustee, or the value, at
the time of transfer, of the property transferred to the trustee, for the
purpose of the creation or issue of that unit.
"102N. For the purposes of this Division, a unit trust is a trading trust in
relation to a year of income if, at any time during the year of income, the
(a) carried on a trading business; or
(b) controlled, or was able to control, directly or indirectly, the affairs
or operations of another person in respect of the carrying on by that other
"102P. (1) For the purposes of this Division, but subject to the succeeding
provisions of this section, a unit trust is a public unit trust in relation to
a year of income if, at any time during the year of income -
(a) any of the units in the unit trust were listed for quotation in the
official list of a stock exchange in Australia or elsewhere;
(b) any of the units in the unit trust were offered to the public; or
(c) the units in the unit trust were held by not fewer than 50 persons.
"(2) For the purposes of this Division, but subject to the succeeding
provisions of this section, a unit trust is also a public unit trust in
relation to a year of income if -
(a) at any time during the year of income, an exempt entity or exempt
entities held, or had the right to acquire or become the holder or holders of,
a unit or units in the unit trust that entitled the holder or holders to not
(i) the beneficial interests in the income of the unit trust; or
(ii) the beneficial interests in the property of the unit trust;
(b) not less than 20% of the total of money paid or credited by the trustee
of the unit trust during the year of income to unitholders as unitholders was
paid or credited to an exempt entity or exempt entities; or
(i) any provision in the instrument by which the trust was
created, or any contract, agreement or instrument authorising
the variation or abrogation of the rights attaching to any of
the units in the unit trust or relating to the conversion,
cancellation, extinguishment or redemption of any such units;
(ii) any contract, agreement, option or instrument under which
a person has power to acquire a unit or units in the unit
(iii) any power, authority or discretion in a person in relation to
the rights attaching to any of the units in the unit trust,
the rights attaching to any of the units in the unit trust were, at any time
during the year of income, capable of being varied or abrogated in such a
manner (notwithstanding that they were not in fact varied or abrogated in that
(iv) units in the unit trust that entitled the holder or holders to
(A) the beneficial interests in the income of the unit trust;
(B) the beneficial interests in the property of the unit
would have been held by an exempt entity or exempt entities;
(v) not less than 20% of the total of money paid or credited by
the trustee of the unit trust during the year of income to
unitholders as unitholders would have been paid or credited
to an exempt entity or exempt entities; or
(vi) in the case where no money was paid or credited by the
trustee of the unit trust during the year of income to
unitholders as unitholders - if money had been so paid or credited by the
trustee of the unit trust during the year of income, not less than 20% of the
amount of that money would have been paid or credited to an exempt entity or
"(3) A unit trust shall not be taken to be a public unit trust in relation
to a year of income by reason that units in the unit trust were offered to the
public at any time during the year of income if the Commissioner is of the
opinion that any of those units were offered to the public for the purpose, or
for purposes that included the purpose, of enabling the unit trust to be
treated as a public unit trust for the purposes of this Division in relation
"(4) Subject to sub-section (5), a unit trust that, but for this sub-section
and sub-section (7), would be a public unit trust in relation to a year of
income by virtue only of sub-section (1) shall be deemed not to be a public
unit trust in relation to the year of income if, at any time during the year
of income, one person or persons not more than 20 in number held, or had the
right to acquire or become the holder or holders of, a unit or units in the
unit trust that entitled the holder or holders thereof to not less than 75% of
(a) the beneficial interests in the income of the unit trust; or
(b) the beneficial interests in the property of the unit trust.
"(5) Subject to sub-section (7), where by virtue of sub-section (4), a unit
trust would, but for this sub-section, be deemed not to be a public unit trust
in relation to a year of income by reason that, at any time during the year of
income, one person or persons not more than 20 in number held, or had the
right to acquire or become the holder or holders of, the unit or units
referred to in sub-section (4) and the Commissioner is of the opinion that,
(a) the length of the period or the aggregate of the lengths of the periods
in the year of income during which one person or persons not more than 20 in
number held, or had the right to acquire or become the holder or holders of,
the unit or units referred to in sub-section (4); and
(b) any other matters that the Commissioner considers relevant,
it is reasonable that the unit trust should be treated as a public unit trust
in relation to the year of income, the unit trust shall be deemed to be a
public unit trust in relation to the year of income.
"(6) For the purposes of sub-sections (4) and (5), a person (in this
subsection referred to as the 'transferee') to whom a right to acquire or
become the holder of a unit in a unit trust is granted or transferred shall be
deemed not to have such a right if the Commissioner is of the opinion, having
regard to the financial circumstances of the transferee and to any other
matters that the Commissioner considers relevant, that it was not intended by
the person who granted or transferred the right to the transferee that the
right would be exercised by the transferee.
"(7) Subject to sub-section (8), a unit trust that, but for this
sub-section, would be a public unit trust in relation to a year of income by
virtue only of sub-section (1), shall be deemed not to be a public unit trust
in relation to that year of income if -
(a) not less than 75% of the total of money paid or credited by the trustee
of the unit trust during the year of income to unitholders as unitholders was
paid or credited to one person or persons not more than 20 in number; or
(i) any provision in the instrument by which the trust was
created, or any contract, agreement or instrument authorising
the variation or abrogation of the rights attaching to any of
the units in the unit trust or relating to the conversion,
cancellation, extinguishment or redemption of any such units;
(ii) any contract, agreement, option or instrument under which
a person has power to acquire a unit or units in the unit
(iii) any power, authority or discretion in a person in relation to
the rights attaching to any of the units in the unit trust,
the rights attaching to any of the units in the unit trust were, at any time
during the year of income, capable of being varied or abrogated in such a
manner (notwithstanding that they were not in fact varied or abrogated in that
(iv) units in the unit trust that entitled the holder or holders
thereof to not less than 75% of -
(A) the beneficial interests in the income of the unit trust;
(B) the beneficial interests in the property of the unit
would have been held by one person or persons not more than 20 in number;
(v) not less than 75% of the total of money paid or credited by
the trustee of the unit trust during the year of income to
unitholders as unitholders would have been paid or credited
to one person or persons not more than 20 in number; or
(vi) in the case where no money was paid or credited by the
trustee of the unit trust during the year of income to
unitholders as unitholders - if money had been so paid or
credited by the trustee of the unit trust during the year of income, not less
than 75% of the amount of that money would have been paid or credited to one
person or persons not more than 20 in number.
"(8) A unit trust shall not be deemed by sub-section (7) not to be a public
unit trust in relation to a year of income by reason that rights attaching to
any of the units in the unit trust were, at any time during the year of
income, capable of being varied in the manner mentioned in paragraph (7) (b)
if the Commissioner is of the opinion that the person or persons who were able
to vary the rights in that manner intended not to vary the rights in that
manner during the year of income.
"(9) For the purposes of sub-sections (1) and (3), units in a unit trust
shall be taken to be offered to the public if and only if -
(a) an offer is made to the public or to a section of the public to
subscribe for or purchase the units; or
(b) an invitation is issued to the public or to a section of the public to
make offers to subscribe for or purchase the units.
"(10) For the purposes of this section, where any units in a unit trust are
held by the trustee of another trust estate, a person who has a beneficial
interest in property of that other trust estate that consists of those units
(whether or not that beneficial interest is deemed to be held by virtue of the
application of this sub-section) shall be deemed to hold those units.
"(11) For the purposes of this section, a distribution of property of a unit
trust to a unitholder shall be taken to be a payment of money to the
unitholder of an amount equal to the value of the property.
"(12) For the purposes of this section -
(a) a person, whether or not he or she holds units in the unit trust
(c) in relation to any units in respect of which they are such nominees,
his or her nominees and the nominees of any of his or her relatives, shall
"102Q. For the purposes of this Division, a unit trust is a resident unit
trust in relation to a year of income if, at any time during the year of
(a) either of the following conditions was satisfied:
(i) any property of the unit trust was situated in Australia;
(ii) the trustee of the unit trust carried on business in Australia;
(b) either of the following conditions was satisfied:
(i) the central management and control of the unit trust was in
(ii) a person who was a resident or persons who were residents
(A) the beneficial interests in the income of the unit trust;
(B) the beneficial interests in the property of the unit
"102R. (1) A unit trust is a public trading trust in relation to a relevant
(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
(iii) the unit trust is a trading trust in relation to the relevant
(iv) either of the following conditions is satisfied:
(A) the unit trust is a resident unit trust in relation to the
(B) the unit trust was a public trading trust in relation to
a year of income preceding the relevant year of income;
(v) the unit trust is not a corporate unit trust within the meaning
of Division 6B in relation to 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
(ii) the unit trust is a trading trust in relation to the relevant
(iii) either of the following conditions is satisfied:
(A) the unit trust is a resident unit trust in relation to the
(B) the unit trust was a public trading trust in relation to
a year of income preceding the relevant year of income; and
(iv) the unit trust is not a corporate unit trust within the meaning
of Division 6B in relation to the relevant year of income.
(a) a unit trust would, but for this sub-section, be a unit trust
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 sub-section (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.
(a) a unit trust would, but for this sub-section, be a unit trust
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
the unit trust shall be taken, for the purposes of this section, to have been
established after 19 September 1985.
Taxation of net income of public trading trust
"102S. The trustee of a unit trust that is a public trading trust in
relation to a relevant year of income shall be assessed and is liable to pay
tax on the net income of the public trading trust of the relevant year of
income at the rate declared by the Parliament for the purposes of this
Modified application of Act in relation to certain unit trusts
"102T. (1) For the purpose of the application of this Act in relation to the
imposition, assessment and collection of tax in respect of -
(a) the net income of a public trading trust; and
(b) the income or assessable income of a unitholder in a prescribed trust
the following provisions of this section have effect.
"(2) Subject to the succeeding provisions of this section, sections 46, 46A
and 46B apply, mutatis mutandis, in relation to trustees of public trading
trusts and in relation to unit trust dividends so that -
(a) the trustee of a public trading trust, being a shareholder in a company
or a unitholder in a prescribed trust estate, will be entitled to a rebate of
tax under section 46 or 46A in respect of dividends or unit trust dividends
included in the net income of the public trading trust in like manner as a
shareholder, being a company that is a resident but not being a private
company, is entitled to a rebate of tax in respect of dividends included in
(b) a unitholder in a prescribed trust estate, being a company that is a
resident but not being the trustee of a public trading trust, will be entitled
to a rebate of tax under section 46 or 46A in respect of unit trust dividends
included in its taxable income in like manner as a shareholder, being a
company that is a resident but not being a private company, is entitled to a
rebate of tax in respect of dividends included in its taxable income.
"(3) For the purposes of the application of sections 46A and 46B in
accordance with sub-section (2), the Commissioner may be satisfied, in
relation to a unit trust dividend, that a transaction, operation, undertaking,
scheme or arrangement was by way of dividend stripping or similar to a
transaction, operation, undertaking, scheme or arrangement by way of dividend
stripping if the Commissioner would have been satisfied, had the unit trust
dividend been a dividend paid by a company, that the transaction, operation,
undertaking, scheme or arrangement would have been a transaction, operation,
undertaking, scheme or arrangement by way of dividend stripping or, as the
case requires, would have been similar to a transaction, operation,
undertaking, scheme or arrangement by way of dividend stripping.
"(4) For the purposes of sub-sections (2) and (3) -
(a) the reference in paragraph (2)(a) to a prescribed trust estate
includes a reference to a trust estate that is a prescribed trust estate
for the purposes of Division 6B;
(b) the reference in paragraph (2) (b) to a public trading trust includes
a reference to a unit trust that is a corporate unit trust for the purposes
(c) references in those sub-sections to a unit trust dividend include
references to a unit trust dividend within the meaning of Division 6B.
"(5) Section 221AC shall have effect as if there were inserted after
subsection (1) of that section the following sub-section:
'(1A) Subject to sub-section (2), for the purpose of securing generally the
more expeditious collection of income tax payable by trustees of public
trading trusts, a trustee of a public trading trust is liable to pay, during
the relevant year of tax and in accordance with this Division, 3 instalments
of tax in respect of income of the year of income that commenced on 1 July
1985 and in respect of income of each subsequent year of income.'.
"(6) For the purposes of the application of the definition of 'year of
income' in sub-section 6 (1), the reference in that definition to a company
(except a company in the capacity of a trustee) shall be read as including a
reference to a public trading trust or, as the context requires, to the
trustee of a public trading trust.
"(7) A reference in the definition of 'person' in sub-section 6 (1) or in
section 160AF or Division 1A of Part VI (other than sub-section 221AA (1) or
section 221AC) to a company shall be read as including a reference to a public
trading trust or, as the context requires, to the trustee of a public trading
"(8) The reference in section 158 to the taxable income of a company except
income in respect of which it is assessable as trustee shall be read as
including a reference to the net income of a public trading trust.
"(9) The reference in sub-section 221AA (1) to income tax that a company is
liable to pay in the capacity of a trustee shall be read as not including a
reference to income tax that a company, being the trustee of a public trading
trust, is liable to pay in respect of the net income of the public trading
"(10) For the purposes of sub-section 221YB (1), the trustee of a public
trading trust shall be taken to be a company not being a company in the
"(11) A reference in paragraph 23 (jb), sub-section 44 (1), section 128B or
Division 4 of Part VI (other than sub-section 221YK (2)) to a company or to a
company that is a resident shall be read as including a reference to a
prescribed trust estate or, as the context requires, to the trustee of a
"(12) A reference in the definition of 'paid' in sub-section 6 (1) or in
paragraph 23 (jb), sub-section 44 (1), section 116AA, 128A or 128B or Division
4 of Part VI (other than sub-section 221YK (2)) to a dividend shall be read as
including a reference to a unit trust dividend.
"(13) A reference in sections 116AA and 221YL to a share in relation to a
company shall be read as including a reference to a unit in a prescribed trust
"(14) A reference in sub-section 44 (1) to a shareholder in relation to a
company shall be read as including a reference to a unitholder in a prescribed
"(15) A reference in Division 1A of Part VI (other than section 221AC) to
taxable income in relation to a company shall be read as including a reference
to the net income of a public trading trust.
"(16) A reference in section 6B, Division 6 or sub-section 128A (3) or 157
(3) to a trust estate or to a trustee shall be read as not including a
reference to a trust estate that is a public trading trust or to the trustee
of a public trading trust, as the case may be.
"(17) A reference in paragraph 26 (b) to beneficial interests in income
derived under an instrument of trust shall be read as not including a
reference to beneficial interests in income of a public trading trust.
"(18) The reference in sub-section 221YL (1) to the register of members in
relation to a company shall be read as including a reference to any book,
document or record in the possession of, or kept or maintained by or on behalf
of, the trustee of a prescribed trust estate, being a book, document or record
containing, or containing information relating to, the names or addresses of
unitholders in the prescribed trust estate.
"(19) For the purposes of sub-section 44 (1), a unit trust dividend paid by
the trustee of a prescribed trust estate out of corpus of the trust estate
shall, to the extent to which the unit trust dividend is attributable to
profits derived by the trustee, be taken to be paid out of those profits.
"(20) For the purposes of section 128B, a unit trust dividend paid to a
unitholder in a prescribed trust estate shall be deemed to be income derived
by the unitholder at the time at which the unit trust dividend is paid.".