Refunding imputation credits - Trustees

When is a trustee liable to be assessed under section 99?

Trustees must be liable to be assessed under section 99 of the ITAA 1936 in respect of a resident trust estate to be eligible for the refund.

A trustee is liable to be assessed under section 99 of the ITAA 1936 where:

• there is an amount of net income of the trust (as determined under section 95 of the ITAA 1936) to which no beneficiary is presently entitled; and
• the Commissioner is of the opinion that it would be unreasonable for the trustee to be assessed under section 99A of the ITAA 1936; and
• the trust estate:
• is a deceased estate; or
• is a bankrupt estate administered by the Official Receiver or a registered trustee; or
• consists of property that was transferred to the trustee for the benefit of the beneficiary by way of damages for loss of parental support or for mental or physical injury, workers' or criminal injury compensation, death benefits under life insurance policies etc, property received from a public fund for the relief of persons in necessitous circumstances, or property received in certain family breakdown situations.

Trustees of resident trust estates who are liable to be assessed under section 99 of the ITAA 1936 are taxed on the net income of the trust to which no beneficiary is presently entitled at resident individual rates without the tax-free threshold. The tax-free threshold applies in the case of deceased estates less than 3 years old before the end of the income year in which the trustee is liable to be assessed.