The Issues Log

Issue: OB 1 'beneficiary income'

Submission Number	011
Submitters:	Evan McCaughan/Sarah Jackson - Chapman Tripp
Section / Provision Income Tax Act 2004	Income Tax Act 2004, section OB 1
Date Received	08/04/05
Description of issue	The amended definition of "beneficiary income" prevents any accrual income derived by a trustee (including for example ordinary interest income) from being beneficiary income. It should only prevent forgiveness of debt income arising under section EW 51 from being beneficiary income.
Section / Provision Income Tax Act 1994	OB 1
Status	Finalised
Outcome	The Panel have considered the issue and agree that the omission of the reference to subsection (2) of section CC 3 in the definition of "beneficiary income" in section OB 1 of the ITA 2004 is a cross-referencing error. Section OB 1 has now been retrospectively amended.