Income Tax Act 2007 section 479

Trustees' accumulated or discretionary income to be charged at special rates

Section 479 requires that accumulated or discretionary income arising to trustees of a non-charitable settlement is charged to income tax at special trust rates rather than the normal rates.

• Where accumulated or discretionary income arises to the trustees of a settlement (other than a charitable trust), special tax rates apply instead of the usual income tax rates.
• Dividend income within the trust is taxed at the dividend trust rate, while all other accumulated or discretionary income is taxed at the trust rate.
• These special rates apply to the trustees even where the income will ultimately be taxed as the settlor's income — in such cases, the settlor receives credit for the full amount of tax already paid by the trustees.
• An exception exists for trustees of Schedule 2 share incentive plans, where this section is disapplied by section 488.