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INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

Division 115 - Discount capital gains and trusts' net capital gains    View history reference

Subdivision 115-C - Rules about trusts with net capital gains    View history reference

Guide to Subdivision 115-C

SECTION 115-200  What this Division is about  

 View history reference

This Subdivision sets out rules for dealing with the net income of a trust that has a net capital gain. The rules treat parts of the net income attributable to the trust's net capital gain as capital gains made by the beneficiary entitled to those parts. This lets the beneficiary reduce those parts by any capital losses and unapplied net capital losses it has.

If the trust's capital gain was reduced by either the general 50% discount in step 3 of the method statement in subsection 102-5(1) or by the small business 50% reduction in Subdivision 152-C (but not both), then the gain is doubled. The beneficiary can then apply its capital losses to the gain before applying the appropriate discount percentage (if any) or the small business 50% reduction.

If the trust's capital gain was reduced by both the general 50% discount and the small business 50% reduction, then the gain is multiplied by 4. The beneficiary can then apply its capital losses to the gain before applying the appropriate discount percentage (if any) and the small business 50% reduction.

Division 6E of Part III of the Income Tax Assessment Act 1936 will exclude amounts from the beneficiary's assessable income if necessary to prevent it from being taxed twice on the same parts of the trust's net income.


TABLE OF SECTIONS

Operative provisions
115-210When this Subdivision applies
115-215Assessing presently entitled beneficiaries
115-220Assessing trustees under section 98 of the Income Tax Assessment Act 1936
115-222Assessing trustees under section 99 or 99A of the Income Tax Assessment Act 1936
115-225Attributable gain
115-227Share of a capital gain
115-228Specifically entitled to an amount of a capital gain
115-230Choice for resident trustee to be specifically entitled to capital gain


 



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