Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 276.505

  (1)   An instrument that gives rise to an interest in a trust is a debt - like trust instrument in relation to the trust if:

  (a)   the amount of any distribution relating to the interest is fixed, at the time the interest is created, by reference to the amount subscribed for the interest; and

  (b)   any distribution relating to the interest is made solely at the discretion of the trustee of the trust; and

  (c)   rights to distributions of capital or profits arising from all interests in the trust that are in the same * class as the interest, rank above all such rights arising from other interests in the trust (other than those covered under subsection   (2)) if:

  (i)   the trust ceases to exist; or

  (ii)   where the trust is a * managed investment scheme--the scheme is under administration or is being wound up; and

  (d)   in a case where, in relation to a particular period, the trustee of the trust does not make a distribution relating to the interest--making a distribution of any of the following kinds, in relation to that period, is prohibited by the constituent documents of the trust:

  (i)   a distribution relating to any membership interest in the trust;

  (ii)   a distribution relating to a membership interest in another entity, if that interest is stapled together with a membership interest in the trust.

  (2)   This subsection covers an interest in the trust that:

  (a)   is not a * membership interest in the trust; or

  (b)   satisfies the requirements in paragraphs   (1)(a) and (b).