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INCOME TAX ASSESSMENT ACT 1997 - SECT 385.163

Disentitling events

             (1)  A disentitling event happens when:

                     (a)  you die; or

                     (b)  you become bankrupt, insolvent, commence to be wound up, apply to take the benefit of a law for the relief of bankrupt or insolvent debtors, compound with creditors, or make an assignment of any property for the benefit of creditors; or

                     (c)  you leave Australia permanently, or it appears to the Commissioner that you are about to do so; or

                     (d)  you cease to carry on the * primary production business to which the election relates.

             (2)  In the case of a partnership, a disentitling event happens when:

                     (a)  a partner in the partnership becomes bankrupt, insolvent, commences to be wound up, applies to take the benefit of a law for the relief of bankrupt or insolvent debtors, compounds with creditors, or makes an assignment of any property for the benefit of creditors; or

                     (b)  a partner leaves Australia permanently, or it appears to the Commissioner that a partner is about to do so; or

                     (c)  the partnership ceases to carry on the * primary production business to which the election relates; or

                     (d)  there is a variation in the constitution of the partnership or the interests of the partners.

             (3)  In the case of a trust, a disentitling event happens when:

                     (b)  an order for the administration of the trust estate is made under a law relating to bankruptcy; or

                     (c)  a beneficiary becomes bankrupt, insolvent, commences to be wound up, applies to take the benefit of a law for the relief of bankrupt or insolvent debtors, compounds with creditors, or makes an assignment of any property for the benefit of creditors; or

                     (d)  the trustee or a beneficiary leaves Australia permanently, or it appears to the Commissioner that the trustee or a beneficiary is about to do so; or

                     (e)  the trustee ceases to carry on the * primary production business to which the election relates.

             (4)   However, in the case of a trust, a disentitling event does not happen if:

                     (a)  either:

                              (i)  the disentitling event is covered by paragraph 3(c); or

                             (ii)  the disentitling event is covered by paragraph 3(d) and a beneficiary leaves Australia permanently, or it appears to the Commissioner that a beneficiary is about to do so; and

                     (b)  the Commissioner makes a determination under subsection (5).

             (5)  The Commissioner may make a determination for the purpose of subsection (4) if it is fair and reasonable to do so having regard to:

                     (a)  the nature of the * disentitling event to which subsection (3) applies; and

                     (b)  any relevant circumstances relating to the beneficiary mentioned in paragraph (3)(c) or (d); and

                     (c)  any other relevant circumstances relating to the trust; and

                     (d)  any other matters the Commissioner considers relevant.

             (6)  A determination made under subsection (5) must be made in writing.

             (7)  The Commissioner must give the trustee of the trust a copy of the determination.



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