1207Y

Attribution of income

In force

(1)

For the purposes of this Act, if:

(a)

during a particular derivation period of a company or trust, the company or trust derives an amount that is ordinary income; and

(b)

an individual is an attributable stakeholder of the company or a trust throughout the attribution period that relates to the derivation period of the company or trust; and

(c)

the attribution period begins on or after 1 January 2002; and

(d)

if that amount:

(i)

had been derived by the individual instead of by the company or trust; and

(ii)

in the case of income accounted for on an accrual basis as mentioned in subsection (5)—had been so derived by the individual on a cash basis;

that amount would have been ordinary income of the individual; and

(e)

that amount is not excluded income (see subsection (2));

then, in addition to any other ordinary income of the individual, the individual is taken to receive, during that attribution period, ordinary income at an annual rate equal to the individual’s income attribution percentage of the amount worked out using the formula:

Start formula start fraction Amount referred to in paragraph (a) over Number of days in the derivation period end fraction times 365 end formula

Note:

For attribution of the income of a special disability trust, see section 1209V.

Excluded income

(2)

The Secretary may, by writing, determine that, for the purposes of the application of subsection (1) to a specified individual and a specified company or trust, a specified amount is excluded income.

(3)

A determination under subsection (2) has effect accordingly.

(4)

In making a determination under subsection (2), the Secretary must comply with any relevant decision‑making principles.

Accrual v. cash accounting

(5)

If the income of a company or trust is accounted for on an accrual basis for the purposes of section 6‑5 of the Income Tax Assessment Act 1997, the ordinary income of the company or trust is accounted for on an accrual basis for the purposes of this section.

(6)

If the income of a company or trust is accounted for on a cash basis for the purposes of section 6‑5 of the Income Tax Assessment Act 1997, the ordinary income of the company or trust is accounted for on a cash basis for the purposes of this section.

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