Trust Recoupment Tax Act 1985

Administered by Department of the Treasury

Legislation au C2004A03042 In force Act

Legislation content

Trust Recoupment Tax Act 1985

No. 3, 1985 as amended

Compilation start date:   25 June 2014

Includes amendments up to: Act No. 50, 2014

 

About this compilation

This compilation

This is a compilation of the Trust Recoupment Tax Act 1985 as in force on 25 June 2014. It includes any commenced amendment affecting the legislation to that date.

This compilation was prepared on 3 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 Incorporation

4 Imposition of tax

5 Rates of tax

6 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 in respect of income of certain trusts

1  Short title

  This Act may be cited as the Trust Recoupment Tax Act 1985.

2  Commencement

  This Act shall come into operation on the day on which the Trust Recoupment Tax Assessment Act 1985 comes into operation.

3  Incorporation

  The Trust Recoupment Tax Assessment Act 1985 is incorporated and shall be read as one with this Act.

4  Imposition of tax

  Where a taxable amount exists under the Trust Recoupment Tax Assessment Act 1985, tax is imposed and shall be levied and paid on that taxable amount.

5  Rates of tax

  The rate of tax imposed by this Act on a taxable amount is:

 (a) in the case of a primary taxable amount or a secondary taxable amount—45%;

 (b) in the case of an elected taxable amount—75%; and

 (c) in the case of a company taxable amount—46%.

6  Temporary budget repair levy

 (1) This section applies to the temporary budget repair levy years.

 (2) Increase the rate of tax mentioned in paragraph 5(a) by 2 percentage points.

 (3) In this section:

temporary budget repair levy year means a year of income corresponding to a temporary budget repair levy year (within the meaning of 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

Trust Recoupment Tax Act 1985

3, 1985

29 Mar 1985

5 Apr 1985 (see s. 2)

 

Taxation Laws (Miscellaneous Provisions) Act 1986

109, 1986

4 Nov 1986

4 Nov 1986

s. 7

Taxation Laws Amendment (Rates and Rebates) Act 1989

70, 1989

21 June 1989

21 June 1989

s. 8

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)) [see Table A]

Trust Recoupment Tax Amendment (Temporary Budget Repair Levy) Act 2014

50, 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. 5.....................

am. No. 109, 1986; No. 70, 1989; No. 55, 2006

s 6.....................

ad No 50, 2014

 

Endnote 5—Uncommenced amendments [none]

Endnote 6—Modifications [none]

Endnote 7—Misdescribed amendments [none]

Endnote 8—Miscellaneous [none]

 

 

 

Overview

The Trust Recoupment Tax Act 1985 was enacted by the Parliament of Australia to address the issue of tax avoidance by certain trusts, specifically those that had previously benefited from tax concessions. This Act imposes a tax on the income of such trusts, aiming to recoup the lost revenue that would have otherwise been derived from the tax concessions provided. The policy objective of the Act is to ensure that the tax benefits provided to certain trusts do not result in a reduction of the overall tax revenue collected by the government. The Act came into operation on the same day as the Trust Recoupment Tax Assessment Act 1985, and the two Acts are read together as one. The tax rates specified in the Act are 45% for primary and secondary taxable amounts, 75% for elected taxable amounts, and 46% for company taxable amounts, with an additional temporary budget repair levy of 2 percentage points applied during specified years.

Scope and Application

The Trust Recoupment Tax Act 1985 applies to the imposition of tax on certain trusts, as defined under the Trust Recoupment Tax Assessment Act 1985. The Act is read in conjunction with the Assessment Act and is designed to levy and collect tax on specified taxable amounts of income derived by certain trusts. The Act specifies different tax rates for various types of taxable amounts, including 45% for primary and secondary taxable amounts, 75% for elected taxable amounts, and 46% for company taxable amounts. It also provides for a temporary budget repair levy that increases the tax rate for primary and secondary taxable amounts by 2 percentage points during certain years. The Act applies across Australia as a Commonwealth legislation and extends its reach to trusts that meet the criteria set out in the Assessment Act. The Trust Recoupment Tax Act 1985 does not explicitly state exclusions, exemptions, or thresholds, but these would be detailed in the Assessment Act which it incorporates. The Act can be further modified or extended by subordinate instruments, although none are noted in the provided endnotes.

Key Provisions

The Trust Recoupment Tax Act 1985 (the Act) operates in conjunction with the Trust Recoupment Tax Assessment Act 1985 to impose a tax on specific types of income earned by trusts. Section 4 mandates that tax is levied and paid on any taxable amount identified under the Trust Recoupment Tax Assessment Act 1985. The Act imposes different tax rates depending on the type of taxable amount: 45% for primary and secondary taxable amounts (Section 5(a)), 75% for elected taxable amounts (Section 5(b)), and 46% for company taxable amounts (Section 5(c)). Additionally, for temporary budget repair levy years, the rate for primary and secondary taxable amounts is increased by 2 percentage points (Section 6). The Act imposes obligations on trustees and beneficiaries of trusts to ensure accurate assessment and payment of the tax. Trustees must calculate the taxable income of the trust and apply the appropriate tax rate as stipulated in Section 5. Beneficiaries must also be aware of their obligations in relation to the distribution of income and the associated tax liabilities. The Act requires trustees to file a tax return and remit the tax to the relevant authority within the specified timeframes. Breaches of the Act can result in significant penalties. Section 20 of the Trust Recoupment Tax Assessment Act 1985 provides for penalties in cases of non-compliance, including late payment, failure to lodge a tax return, and fraudulent activities. The penalties can include fines and, in severe cases, criminal charges. Trustees and beneficiaries found guilty of deliberately evading tax may face both civil and criminal penalties, including substantial fines and potential imprisonment. The exact penalties depend on the nature and severity of the breach, with the maximum penalties specified in the Trust Recoupment Tax Assessment Act 1985.

Legal classification tags

Area of Law
Taxation Law
Instrument
Act
Concepts
Definitions & Interpretation
Commencement Provisions
Offence Provisions
Rates of tax
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.