Issue
Does subsection 272-80(11) of Schedule 2F to the Income Tax Assessment Act 1936 (ITAA 1936) prevent the trustee of a trust making a family trust election (FTE) in respect of that trust after an FTE previously made in respect of the trust has been revoked?
Decision
Yes. Subsection 272-80(11) of Schedule 2F to the ITAA 1936 will prevent the trustee of a trust making an FTE in respect of that trust.
Facts
X Trust is a fixed trust for the purposes of section 272-65 of Schedule 2F to the ITAA 1936.
The trustee of X Trust made an FTE specifying the 2000-01 year of income.
During the 2004-05 year of income all of the fixed entitlements in X Trust were sold and the trustee decided to revoke the FTE in accordance with subsection 272-80(6) of Schedule 2F to the ITAA 1936. Consequently, the trustee lodged an FTE revocation with X Trust's 2004-05 income tax return.
The trustee would like to make an FTE specifying the 2007-08 year of income.
Reasons for Decision
Subsection 272-80(11) of Schedule 2F to the ITAA 1936 provides that, 'the trustee must not make more than one election under this section in relation to the trust'.
In this case the X Trust had previously made an FTE.
However, this FTE was revoked in accordance with subsection 272-80(6) of Schedule 2F to the ITAA 1936.
According to subsection 272-80(11) of Schedule 2F to the ITAA 1936 no more than one FTE can be made in relation to a trust. Therefore, the trustee is prevented from making a further FTE.
Amendment History
Date of Amendment Part Comment 27 October 2017 Legislative references Section added Keywords Keyword added Issue Minor grammatical correction
Date of Amendment | Part | Comment
27 October 2017 | Legislative references | Section added
Keywords | Keyword added
Issue | Minor grammatical correction