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For information on completing this item click this link to the FTE status and IEE status on the ATO website.

All the particulars required in Section A of the schedule must be provided in order for an interposed entity election specifying a day in the current income year to be duly made in accordance with section 272-85 Income Tax Assessment Act 1936 (ITAA 1936) and in order for an interposed entity election specifying a day in an income year prior to the current to meet the requirements of subitem 23(4) of Schedule 1 to Taxation Laws Amendment (Trust Loss and Other Deductions) Act 1998 (Trust Loss Act).

The interposed entity election, Schedule Y, is valid for the Company, Partnership, Fund and Trust forms. An interposed entity election schedule is irrevocable.

Entities may make more than one interposed entity election by attaching multiple schedules to a return. Only one election per schedule may be made.

The following points should be noted:

  • For Partnership and Trust returns the interposed entity election status fields are on the Front Cover of the return

  • For SMSF returns the interposed entity election status fields are contained in Section J: Other information

  • For Company returns the interposed entity election status fields are on the Front Cover of the return

Revoking an Interposed Entity Election

If you are revoking an Interposed Entity Election (IEE), enter R or select R from the drop-down-list at the relevant files in the return and complete and attach the Interposed Entity Election or Revocation schedule (Y).

If you are not revoking a previous IEE, leave the field blank.

Completing the Interposed Entity Election - Section A

Items 5a and 5b
Entity typeAnswer the question at Item...
PartnershipIf the entity making the interposed entity election is a partnership, item 5 of Section A of the schedule is not applicable.
Trust (including Funds)

Answer question at Item 5a:

  •  If the interposed entity management and control of the trust outside Australia at any time during the period from the election commencement time (see items 7 and 8) until the time the time the election is made (relevant period)?'
  • If the central management and control of the trust was outside Australia during the relevant period, but not for the whole of the relevant period, the start and end date of each period during the relevant period in which it was outside Australia must be given in Item 5a. The start date of each such period must not be earlier than the election commencement time for the interposed entity election (see items 7 and 8).

Company

 Answer the question at Item 5b:

  • 'If the interposed entity is a company, was the company a non-resident for tax purposes at any time during the period from the election commencement time (see items 7 and 8) until the time the election is made (relevant period)?'

  • If the company was a non-resident for tax purposes during the relevant period but not for the whole of the relevant period, the start and end date of each period during the relevant period in which the company was a non-resident for tax purposes must be provided in Item 5b. The start date of each such period must not be earlier than the election commencement time for the interposed entity election (see items 7 and 8).

Item 6
Entity typeAnswer the question at Item...
Partnership

The details to be provided in Item 6 of Section A of the schedule are the full name, TFN, current postal address and residency details of every trustee of the trust or every partner of the partnership during the period from the election commencement time (see instructions to Item 7 and 8 of Section A of the schedule below) until the time the current income year tax return for the trust or partnership, respectively, is lodged with this schedule (relevant period), and where any trustee or partner is a company, the Australian Company Number (ACN) or Australian Registered Body Number (ARBN) of each such trustee or partner.

Trust (including Funds)
Company

If the entity making the interposed entity election is a company, item 6 of this schedule is not applicable.

For example:

Trustees of the XYZ Trust:

The only trustees of the XYZ Trust at the time the interposed entity election for the trust comes into force were Mr John Brown and Mrs Jane Brown. However, Mr John Brown and Mrs Jane Brown retired as trustees of the trust prior to the time of lodgment of the current income year tax return for the trust. They were replaced by Mr Ian Brown, who remained the sole trustee of the trust until the time of lodgment of the current income year tax return for the trust.

The details must be provided in Item 6 of Section A of the schedule for Mr John Brown, Mrs Jane Brown and Mr Ian Brown.

ABC Partnership:

The ABC Partnership had only two partners, Mr John Doe and Mr John Smith at the time the interposed entity election for the partnership comes into force. Before the time of lodgment of the current income year tax return for the partnership, Mr Sam Smith joined the partnership as a partner and Mr John Doe ceased to be a partner of the partnership.

The details must be provided in Item 6 of Section A of the schedule for Mr John Doe, Mr John Smith and Mr Sam Smith.

Non-resident for tax purposes during the relevant period

If a trustee or a partner was a non-resident for tax purposes during the relevant period but not for the whole of the relevant period, the start and end date of each time period during the relevant period in which the trustee or the partner was a non-resident for tax purposes must be provided in Item 6 of Section A.

The start date of each such time period must not be earlier than the election commencement time for the interposed entity election (see instructions to Items 7 and 8 of Section A of the schedule below).

Item 7

In Item 7 of Section A of the schedule, the income year and the day specified for the purposes of the interposed entity election must be provided.

  • If the income year specified for the trust, company or partnership making the interposed entity election does not end on 30 June, the substituted accounting period for that income year must also be provided in Item 7.
  • The day specified for the purposes of the interposed entity election must be a day in the income year thus specified and must not be earlier than the beginning of the income year specified in the family trust election in respect of which the interposed entity election is made (see instructions to Item 6 of Section A of the schedule below).

  • For the 'Income year specified for purposes of the interposed entity election' in Item 7, enter the year which corresponds to the end of the specified income year. For example, if the income year specified is the 2009-2010 income year (including a substituted accounting period in lieu of the 2009-2010 income year), enter '2010'.

Item 8

The election commencement time for the interposed entity election is only to be provided in Item 8 of Section A of the schedule if the income year specified in Item 7 of Section A of the schedule is the current income year and the family control test in section 272-87 of the ITAA 1936 has not been satisfied by the trust, company or partnership making the interposed entity election at all times during that year from the day specified in Item 7 of Section A of the schedule.

In these circumstances, the election commencement time will be the earliest time from which the family control test was passed continuously by the trust, company or partnership, respectively, until the end of the specified income year. In all other circumstances the election commencement time is the day specified in Item 7 of Section A of the schedule.

For example:

ABC Partnership

The partners of the ABC Partnership are making an interposed entity election specifying the 1 January in the current income year. The current income year for the partnership ends on 30 June.

The partnership does not satisfy the family control test in section 272-87 of the ITAA 1936 at all times during the period from 01 January to 01 June, but does begin to continuously satisfy that test from 01 April until the end of the current income year.

In our example the current income year is 2009-2010

  1. In Item 7 of Section A:

    • 2010 is the Interposed entity election - specified income year.

    • 010110 is the Interposed entity election - Specified day, and

    • Substituted accounting period, Date from or Date to are left blank.

  2. In Item 8 of Section A, 010410 is provided for Election commencement time for the interposed entity election.

Item 9

The details to be provided in Item 9 of Section A of the schedule are the full name, TFN and current postal address (including country-if outside Australia) of the family trust in respect of which the interposed entity election is made.

If an interposed entity election is made in respect of more than one family trust in accordance with subsection 272-85(7) of the ITAA 1936 from a day in the current income year or an earlier income year, a separate interposed entity election or revocation schedule must be completed for each election in respect of each family trust.

Item 10

In Item 10 of Section A of the schedule, provide the income year specified in the family trust election for the trust identified in Item 9 of Section A which specifies the individual identified in Item 11 of Section A.

 If the family trust's specified income year does not end on 30 June, the family trust's substituted accounting period for that income year must also be provided in Item 10.

  • The election commencement time for the family trust election only needs to be provided in Item 10 of Section A of the schedule if an election commencement time was provided in the family trust election and/or family trust revocation schedule or form for the family trust identified in Item 9 which specifies the individual identified in Item 11.

  • Details that must correspond exactly to the details in the corresponding fields or labels in the family trust election and/or family trust revocation schedule or form that has been lodged or given to the Commissioner for the family trust identified in Item 9 and which specifies the individual identified in Item 11. The details concerned are:

    • Income year specified in the family trust election,

    • Election commencement time for family trust election - leave this field blank if no date was specified on the relevant family trust election when lodged

    • Substituted accounting period of family trust - Date from and Date to.

Item 11

The details to be provided in Item 11 of Section A of the schedule are the full name, TFN, date of birth and current address of principal place of residence (including country-if outside Australia) of the individual (specified individual) whose family group is taken into account in relation to the family trust election for the trust identified in Item 9 and 10 of Section A and in whose family group the interposed entity (trust, company or partnership) is electing to be included.

  • Only one individual can be specified in a family trust election.

    • The date of birth of the specified individual must not be earlier than election commencement time for the family trust election in respect of which the interposed entity election is made (see instructions to Item 10 of Section A of the schedule above).

    • If an election commencement time was not provided in the family trust election and/or family trust revocation schedule or form for the trust identified in Item 9 which specifies the individual, the election commencement time for the family trust will be the beginning of the income year specified in the family trust election.

Declaration by Trustees/Public Company Officers/Partners

If the entity making the interposed entity election is a trust
  1. If the entity making the interposed entity election is a trust, each trustee of the trust at the time the current income year tax return for the trust is lodged with the schedule must sign the Declaration set out below. If a trustee is a company, the public officer of the trustee must sign the Declaration for that trustee.

  2. Details of the full name of each such trustee and the date the trustee or the trustee's public officer signed the Declaration must be provided in the schedule.

  3. The name of each trustee must be provided exactly as it was provided in Item 6 of Section A of the schedule.

If the entity making the interposed entity election is a partnership
  1. Each partner of the partnership at the time the current income year tax return for the partnership is lodged with the schedule must sign the Declaration. If a partner is a company, the public officer of the partner must sign the Declaration for that partner.

  2. Details of the full name of each such partner and the date the partner or the partner's public officer signed the Declaration must be provided in the schedule.

  3. The name of each partner must be provided exactly as it was provided in Item 6 of Section A of the schedule.

If the entity making the interposed entity election is a company
  1. The company public officer at the time the current income year tax return for the company is lodged with the schedule must sign the Declaration.

  2. Details of the full name of the public officer of the company and the date the company public officer signed the Declaration must be provided in the schedule.

 
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