Contents

1............ Short title [see Note 1] ....................................................................... 1

2............ Commencement [see Note 1] .............................................................. 1

3............ Interpretation ...................................................................................... 1

4............ Application of tax legislation .............................................................. 5

5............ Primary taxable amounts .................................................................... 7

6............ Secondary taxable amounts ............................................................... 11

7............ Requests to eliminate trust recoupment tax on certain taxable amounts 14

8............ Liability to pay trust recoupment tax .............................................. 22

9............ Reduction of liability where tax paid ................................................ 22

10.......... Right of contribution and apportionment of liability ....................... 23

12.......... Penalty tax ........................................................................................ 24

13.......... Arrangements etc. to avoid operation of Act ................................... 28

14.......... Regulations ....................................................................................... 31

Notes                                                                                                                                             33

An Act relating to the assessment and collection of a tax in respect of income of certain trusts

 

 

Notes to the Trust Recoupment Tax Assessment Act 1985

Note 1

The Trust Recoupment Tax Assessment Act 1985 as shown in this compilation comprises Act No. 9, 1985 amended as indicated in the Tables below.

All relevant information pertaining to application, saving or transitional provisions prior to 3 May 2000 is not included in this compilation. For subsequent information see Table A.

Table of Acts

Act	Number and year	Date of Assent	Date of commencement	Application, saving or transitional provisions
Trust Recoupment Tax Assessment Act 1985	9, 1985	5 Apr 1985	5 Apr 1985
Taxation Laws (Miscellaneous Provisions) Act 1986	109, 1986	4 Nov 1986	4 Nov 1986	S. 8
Taxation Laws Amendment (Rates and Rebates) Act 1989	70, 1989	21 June 1989	21 June 1989	S. 9
Taxation Laws Amendment Act (No. 3) 1991	216, 1991	24 Dec 1991	S. 113: 1 Mar 1992 (see Gazette 1992, No. GN7) (a)	S. 114
Income Tax (Consequential Amendments) Act 1997	39, 1997	17 Apr 1997	1 July 1997	--
Taxation Laws Amendment Act (No. 3) 1999	11, 1999	31 Mar 1999	Schedule 1 (item 395): 1 July 1999 (b)	--
A New Tax System (Tax Administration) Act (No. 1) 2000	44, 2000	3 May 2000	Schedule 3 (item 72): (c) Schedule 3 (items 73, 74): 1 July 2000 (c)	Sch. 3 (item 74) [see Table A]
Tax Laws Amendment (Personal Tax Reduction and Improved Depreciation Arrangements) Act 2006	55, 2006	19 June 2006	Schedules 1, 3 and 4: 1 July 2006 Remainder: Royal Assent	Sch. 1 (item 32(1)) [see Table A]
Tax Laws Amendment (Repeal of Inoperative Provisions) Act 2006	101, 2006	14 Sept 2006	Schedule 1 (items 1, 318), Schedule 2 (items 996-1006) and Schedule 6 (items 1, 6-11): Royal Assent	Sch. 6 (items 1, 6-11) [see Table A]
Statute Law Revision Act 2008	73, 2008	3 July 2008	Schedule 4 (item 495): 4 July 2008	--
Tax Laws Amendment (Confidentiality of Taxpayer Information) Act 2010	145, 2010	16 Dec 2010	Schedule 2 (item 122): 17 Dec 2010	--

(a)     The Trust Recoupment Tax Assessment Act 1985 was amended by section 113 only of the Taxation Laws Amendment Act (No. 3) 1991, subsection 2(10) of which provides as follows:

               (10)   Subject to subsection (11), sections 112 to 117 (inclusive) commence on a day to be fixed by Proclamation.

(b)    The Trust Recoupment Tax Assessment Act 1985 was amended by Schedule 1 (item 395) only of the Taxation Laws Amendment Act (No. 3) 1999, subsection 2(3) of which provides as follows:

                 (3)   Subject to subsections (4) and (5), Schedule 1 commences on 1 July 1999.

(c)     The Trust Recoupment Tax Assessment Act 1985 was amended by Schedule 3 (items 72 and 73) only of the A New Tax System (Tax Administration) Act (No. 1) 2000, subsections 2(1) and (9) of which provides as follows:

                 (1)   Subject to this section, this Act commences, or is taken to have commenced, immediately after the commencement of section 1 of the A New Tax System (Tax Administration) Act 1999.

                 (9)   Items 39, 40, 52, 53, 73 and 74 of Schedule 3 commence, or are taken to have commenced, on 1 July 2000.

         Section 1 commenced on 22 December 1999.

Table A

Application, saving or transitional provisions

A New Tax System (Tax Administration) Act (No. 1) 2000 (No. 44, 2000)

Schedule 3

74  Saving

Despite the repeal of subsection 4(8) of the Trust Recoupment Tax Assessment Act 1985 by item 73, that subsection continues to have effect in relation to a person who dies before 1 July 2000.

Tax Laws Amendment (Personal Tax Reduction and Improved Depreciation Arrangements) Act 2006 (No. 55, 2006)

Schedule 1

32  Application

(1)        The amendments made by this Schedule, except the amendment of the Income Tax (Bearer Debentures) Act 1971, apply to assessments for the 2006‑2007 year of income and later years of income.

Tax Laws Amendment (Repeal of Inoperative Provisions) Act 2006
(No. 101, 2006)

Schedule 6

1  Application of Schedule 1 and 2 amendments

Except as mentioned in items 2 and 3, the repeals and amendments made by Schedules 1 and 2 apply:

                     (a)  so far as they affect assessments--to assessments for the 2006‑07 income year and all later income years; and

                     (b)  otherwise--to acts done or omitted to be done, or states of affairs existing, after the commencement of the repeals and amendments.

6  Object

The object of this Part is to ensure that, despite the repeals and amendments made by this Act, the full legal and administrative consequences of:

                     (a)  any act done or omitted to be done; or

                     (b)  any state of affairs existing; or

                     (c)  any period ending;

before such a repeal or amendment applies, can continue to arise and be carried out, directly or indirectly through an indefinite number of steps, even if some or all of those steps are taken after the repeal or amendment applies.

7  Making and amending assessments, and doing other things, in relation to past matters

Even though an Act is repealed or amended by this Act, the repeal or amendment is disregarded for the purpose of doing any of the following under any Act or legislative instrument (within the meaning of the Legislative Instruments Act 2003):

                     (a)  making or amending an assessment (including under a provision that is itself repealed or amended);

                     (b)  exercising any right or power, performing any obligation or duty or doing any other thing (including under a provision that is itself repealed or amended);

in relation to any act done or omitted to be done, any state of affairs existing, or any period ending, before the repeal or amendment applies.

Example 1: On 31 July 1999, Greg Ltd lodged its annual return under former section 160ARE of the Income Tax Assessment Act 1936. The return stated that the company had a credit on its franking account and that no franking deficit tax was payable for the 1998‑99 franking year. Under former section 160ARH of that Act, the Commissioner was taken to have made an assessment consistent with the return.

                   Following an audit undertaken after the repeal of Part IIIAA of that Act, the Commissioner concludes that Greg Ltd fraudulently overfranked dividends it paid during the 1998‑99 franking year, and had a franking account deficit for that franking year. As a result, the Commissioner considers that franking deficit tax and a penalty by way of additional tax are payable.

                   The Commissioner can amend the assessment under former section 160ARN of that Act, because item 7 of this Schedule disregards the repeal of that section for the purposes of making an assessment in relation to the 1998‑99 franking year. Item 7 will also disregard the repeal of Division 11 of former Part IIIAA to the extent necessary for the Commissioner to assess Greg Ltd's liability to a penalty by way of additional tax.

                   Despite the repeal of sections 160ARU and 160ARV, item 9 will ensure that the general interest charge will accrue on the unpaid franking deficit tax and penalty until they are paid.

                   Item 7 will also preserve Greg Ltd's right, under former section 160ART of that Act, to object against the Commissioner's amended assessment (including the penalty), since the objection is the exercise of a right in relation to a franking year that ended before the repeal of Part IIIAA.

Example 2: During the 1997‑98 income year, Duffy Property Ltd withheld amounts from its employees' wages as required by former Divisions 1AAA and 2 of Part VI of the Income Tax Assessment Act 1936. The company failed to notify the Commissioner of those amounts, and failed to remit them to the Commissioner.

                   Following an audit undertaken after the repeal of those Divisions, the Commissioner discovers that the withheld amounts have not been remitted. The company's records are incomplete and the Commissioner is unable to completely ascertain the extent of its liability for the withheld amounts. Under section 222AGA of that Act, the Commissioner makes an estimate of the liability.

                   Item 7 will disregard the repeal of section 220AAZA of that Act (which empowered the Commissioner to recover the amount of the estimate). Even though the estimate is made after the repeal, it relates to amounts withheld before the repeal.

8  Saving of provisions about effect of assessments

If a provision or part of a provision that is repealed or amended by this Act deals with the effect of an assessment, the repeal or amendment is disregarded in relation to assessments made, before or after the repeal or amendment applies, in relation to any act done or omitted to be done, any state of affairs existing, or any period ending, before the repeal or amendment applies.

9  Saving of provisions about general interest charge, failure to notify penalty or late reconciliation statement penalty

If:

                     (a)  a provision or part of a provision that is repealed or amended by this Act provides for the payment of:

                              (i)  general interest charge, failure to notify penalty or late reconciliation statement penalty (all within the meaning of the Income Tax Assessment Act 1936); or

                             (ii)  interest under the Taxation (Interest on Overpayments and Early Payments) Act 1983; and

                     (b)  in a particular case, the period in respect of which the charge, penalty or interest is payable (whether under the provision or under the Taxation Administration Act 1953) has not begun, or has begun but not ended, when the provision is repealed or amended;

then, despite the repeal or amendment, the provision or part continues to apply in the particular case until the end of the period.

10  Repeals disregarded for the purposes of dependent provisions

If the operation of a provision (the subject provision) of any Act or legislative instrument (within the meaning of the Legislative Instruments Act 2003) made under any Act depends to any extent on an Act, or a provision of an Act, that is repealed by this Act, the repeal is disregarded so far as it affects the operation of the subject provision.

11  Schedule does not limit operation of section 8 of the Acts Interpretation Act 1901

This Schedule does not limit the operation of section 8 of the Acts Interpretation Act 1901.