Taxation Administration Act 1953

This section applies if:

the trustee of a trust makes a distribution to a beneficiary of the trust at a time (the distribution time) during an income year of the trust; and

some or all of the distribution is from the *ordinary income or *statutory income of the trust; and

the trust is:

a resident trust estate (within the meaning of subsection 95(2) of the Income Tax Assessment Act 1936) in relation to the income year; and

a closely held trust (within the meaning of section 102UC of that Act); and

not prescribed by the regulations for the purposes of this subparagraph; and

the beneficiary is:

an Australian resident; and

not an *exempt entity; and

not under a legal disability for the purposes of section 98 of that Act.

The trustee must withhold an amount from the distribution, if:

the beneficiary did not *quote the beneficiary’s *tax file number to the trustee before the distribution time; and

the trustee is not liable to pay tax under section 98 of the Income Tax Assessment Act 1936 in connection with the distribution; and

the trustee is not required to make a correct TB statement under Division 6D of Part III of that Act (about trustee beneficiary non‑disclosure tax) in connection with the distribution; and

family trust distribution tax is not payable under Schedule 2F to that Act in connection with the distribution.

If the trust is a unit trust, the trustee may be required to withhold under section 12‑140 in priority to this section: see section 12‑5.

The trustee commits an offence if the trustee fails to withhold an amount as required by this section: see section 16‑25.

If the distribution is not a payment, this Part applies as if the trustee paid the amount of the distribution to the beneficiary at the distribution time.

Subsections (2) and (3) do not apply to the distribution, to the extent that:

the beneficiary is presently entitled, for the purposes of Division 6 of Part III of the Income Tax Assessment Act 1936, to a share of the income of the trust of an earlier income year; and

the distribution is a distribution of some or all of that share.

The trustee may have been required to withhold from that share under section 12‑180.