Family Trust Distribution Tax (Primary Liability) Act 1998

Administered by Department of the Treasury

Legislation au C2004A05323 In force Act

Legislation content

Family Trust Distribution Tax (Primary Liability) Act 1998

No. 10, 1998 as amended

Compilation start date:   25 June 2014

Includes amendments up to: Act No. 41, 2014

 

About this compilation

This compilation

This is a compilation of the Family Trust Distribution Tax (Primary Liability) Act 1998 as in force on 25 June 2014. It includes any commenced amendment affecting the legislation to that date.

This compilation was prepared on 2 July 2014.

The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of each amended provision.

Uncommenced amendments

The effect of uncommenced amendments is not reflected in the text of the compiled law but the text of the amendments is included in the endnotes.

Application, saving and transitional provisions for provisions and amendments

If the operation of a provision or amendment is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.

Modifications

If a provision of the compiled law is affected by a modification that is in force, details are included in the endnotes.

Provisions ceasing to have effect

If a provision of the compiled law has expired or otherwise ceased to have effect in accordance with a provision of the law, details are included in the endnotes.

 

 

 

Contents

1 Short title

2 Commencement

3 Imposition of tax

4 Amount of tax

5 Temporary budget repair levy

Endnotes

Endnote 1—About the endnotes

Endnote 2—Abbreviation key

Endnote 3—Legislation history

Endnote 4—Amendment history

Endnote 5—Uncommenced amendments [none]

Endnote 6—Modifications [none]

Endnote 7—Misdescribed amendments [none]

Endnote 8—Miscellaneous [none]

 

An Act to impose a tax on certain distributions etc. by trusts, partnerships and companies

1  Short title

  This Act may be cited as the Family Trust Distribution Tax (Primary Liability) Act 1998.

2  Commencement

  This Act commences on the day on which it receives the Royal Assent.

3  Imposition of tax

  Tax payable under section 271‑15, 271‑20, 271‑25, 271‑30 or 271‑55 in Schedule 2F to the Income Tax Assessment Act 1936 on the amount or value of income or capital is imposed.

4  Amount of tax

  The amount of the tax imposed by this Act is 47% of the amount or value of the income or capital.

5  Temporary budget repair levy

 (1) This section applies:

 (a) in relation to tax payable under section 271‑55 in Schedule 2F to the Income Tax Assessment Act 1936—to notices mentioned in that section that are given by the Commissioner in a temporary budget repair levy year; or

 (b) otherwise—to present entitlements conferred, or distributions made, in a temporary budget repair levy year.

 (2) Increase the amount of the percentage mentioned in section 4 by 2 percentage points.

 (3) In this section:

temporary budget repair levy year has the same meaning as in section 4‑11 of the Income Tax (Transitional Provisions) Act 1997.

Endnotes

Endnote 1—About the endnotes

The endnotes provide details of the history of this legislation and its provisions. The following endnotes are included in each compilation:

 

Endnote 1—About the endnotes

Endnote 2—Abbreviation key

Endnote 3—Legislation history

Endnote 4—Amendment history

Endnote 5—Uncommenced amendments

Endnote 6—Modifications

Endnote 7—Misdescribed amendments

Endnote 8—Miscellaneous

 

If there is no information under a particular endnote, the word “none” will appear in square brackets after the endnote heading.

 

Abbreviation key—Endnote 2

The abbreviation key in this endnote sets out abbreviations that may be used in the endnotes.

 

Legislation history and amendment history—Endnotes 3 and 4

Amending laws are annotated in the legislation history and amendment history.

 

The legislation history in endnote 3 provides information about each law that has amended the compiled law. The information includes commencement information for amending laws and details of application, saving or transitional provisions that are not included in this compilation.

 

The amendment history in endnote 4 provides information about amendments at the provision level. It also includes information about any provisions that have expired or otherwise ceased to have effect in accordance with a provision of the compiled law.

 

Uncommenced amendments—Endnote 5

The effect of uncommenced amendments is not reflected in the text of the compiled law but the text of the amendments is included in endnote 5.

 

Modifications—Endnote 6

If the compiled law is affected by a modification that is in force, details of the modification are included in endnote 6.

 

Misdescribed amendments—Endnote 7

An amendment is a misdescribed amendment if the effect of the amendment cannot be incorporated into the text of the compilation. Any misdescribed amendment is included in endnote 7.

 

Miscellaneous—Endnote 8

Endnote 8 includes any additional information that may be helpful for a reader of the compilation.

 

Endnote 2—Abbreviation key

 

ad = added or inserted

pres = present

am = amended

prev = previous

c = clause(s)

(prev) = previously

Ch = Chapter(s)

Pt = Part(s)

def = definition(s)

r = regulation(s)/rule(s)

Dict = Dictionary

Reg = Regulation/Regulations

disallowed = disallowed by Parliament

reloc = relocated

Div = Division(s)

renum = renumbered

exp = expired or ceased to have effect

rep = repealed

hdg = heading(s)

rs = repealed and substituted

LI = Legislative Instrument

s = section(s)

LIA = Legislative Instruments Act 2003

Sch = Schedule(s)

mod = modified/modification

Sdiv = Subdivision(s)

No = Number(s)

SLI = Select Legislative Instrument

o = order(s)

SR = Statutory Rules

Ord = Ordinance

Sub‑Ch = Sub‑Chapter(s)

orig = original

SubPt = Subpart(s)

par = paragraph(s)/subparagraph(s)

/sub‑subparagraph(s)

 

 

 

Endnote 3—Legislation history

 

Act

Number and year

Assent

Commencement

Application, saving and transitional provisions

Family Trust Distribution Tax (Primary Liability) Act 1998

10, 1998

6 Apr 1998

6 Apr 1998

 

Tax Laws Amendment (Personal Tax Reduction and Improved Depreciation Arrangements) Act 2006

55, 2006

19 June 2006

Schedules 1, 3 and 4: 1 July 2006
Remainder: Royal Assent

Sch. 1 (item 32(1))

Tax Laws Amendment (2011 Measures No. 2) Act 2011

41, 2011

27 June 2011

Schedule 5 (item 373): Royal Assent

—

Family Trust Distribution Tax (Primary Liability) Amendment (DisabilityCare Australia) Act 2013

38, 2013

28 May 2013

Schedule 1: 28 May 2013 (see s. 2(1))
Remainder: Royal Assent

Sch. 1 (item 2)

Family Trust Distribution Tax (Primary Liability) Amendment (Temporary Budget Repair Levy) Act 2014

41, 2014

25 June 2014

Sch 1: 25 June 2014 (see s 2(1))
Remainder: Royal Assent

—

 

Endnote 4—Amendment history

 

Provision affected

How affected

s. 3.....................

am. No. 41, 2011

s. 4.....................

am. No. 55, 2006; No. 38, 2013

s 5.....................

ad No 41, 2014

 

Endnote 5—Uncommenced amendments [none]

 

Endnote 6—Modifications [none]

 

Endnote 7—Misdescribed amendments [none]

 

Endnote 8—Miscellaneous [none]

 

 

 

Overview

The Family Trust Distribution Tax (Primary Liability) Act 1998 was enacted to address the issue of tax avoidance through the distribution of income by family trusts, partnerships, and companies. This Act was introduced by the Commonwealth Parliament and seeks to impose a tax on certain distributions made by these entities, aiming to ensure that the primary beneficiaries of income are held liable for the tax. The Act imposes a tax of 47% on the amount or value of income or capital distributed by trusts, partnerships, and companies, with an additional temporary budget repair levy of 2% during specified years. The Act commenced on the day it received Royal Assent and has been amended several times to refine its provisions and address specific issues related to tax liabilities and distributions.

Scope and Application

The Family Trust Distribution Tax (Primary Liability) Act 1998 is a Commonwealth Act that imposes a tax on certain distributions made by trusts, partnerships, and companies. The Act applies to entities that are making distributions of income or capital, and it specifically targets the primary liability of these entities to pay the tax. The tax is imposed at a rate of 47% on the amount or value of the income or capital distributed. The Act’s application extends to distributions made in a temporary budget repair levy year, during which an additional 2 percentage points are added to the tax rate. This Act applies nationally across Australia, as it is a Commonwealth Act, and its provisions are enforced under the authority of the Income Tax Assessment Act 1936. The Act does not explicitly state exclusions or exemptions, but the tax liability is generally contingent upon the specific conditions outlined in the Income Tax Assessment Act 1936. The Act’s application can also be extended or modified through subordinate instruments, as indicated by the legislative history and amendment notes, which include various amendments that have been made to the Act over the years.

Key Provisions

The Family Trust Distribution Tax (Primary Liability) Act 1998 (section 3) imposes a tax on the amount or value of income or capital as specified in sections 271-15, 271-20, 271-25, 271-30, and 271-55 of Schedule 2F to the Income Tax Assessment Act 1936. The tax rate is set at 47% of the amount or value of the income or capital (section 4). Furthermore, during a temporary budget repair levy year, as defined in section 4-11 of the Income Tax (Transitional Provisions) Act 1997, the Act mandates an additional 2% increase in the tax rate (section 5(2)). This Act applies to notices given by the Commissioner under section 271-55 in Schedule 2F of the Income Tax Assessment Act 1936 and to present entitlements conferred or distributions made in a temporary budget repair levy year (section 5(1)). The Act imposes several obligations on the entities it governs. Firstly, it requires trusts, partnerships, and companies to account for and pay the tax on the specified amounts or values of income or capital. This includes ensuring that any distributions made are subject to the tax rate of 47%, with an additional 2% during a temporary budget repair levy year. Entities must adhere to the notice requirements outlined in section 271-55 of Schedule 2F of the Income Tax Assessment Act 1936, particularly during temporary budget repair levy years. Moreover, entities must accurately report and disclose all relevant financial information to the Commissioner of Taxation to facilitate the calculation and payment of the tax. There are specific consequences and penalties for non-compliance with the provisions of the Family Trust Distribution Tax (Primary Liability) Act 1998. Entities that fail to comply with the tax obligations outlined in this Act may face civil or criminal penalties. For instance, under the Income Tax Assessment Act 1936, failure to lodge a tax return, provide correct information, or pay the tax when due can result in penalties, which may include fines or imprisonment. The specific penalties for non-compliance are governed by the provisions of the Income Tax Assessment Act 1936 and may include pecuniary penalties, which can be substantial depending on the nature and severity of the non-compliance. Additionally, there may be interest charges on unpaid tax amounts, further increasing the financial burden on non-compliant entities.

Legal classification tags

Area of Law
Taxation Law
Instrument
Act
Concepts
Commencement Provisions
Offence Provisions
Temporary Budget Repair Levy

Interactions

Authorises

All Versions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.