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Edited version of private advice
Authorisation Number: 1051578463712
Date of advice: 12 September 2019
Ruling
Subject: Trust income
Question 1
Does the Court Order, which sets aside previous trust distributions to you, mean that you were not presently entitled to that share of the trust income during the 20XX-XX and 20XX-XX income years for the purposes of Division 6 of the Income Tax Assessment Act 1936 (ITAA 1936)?
Answer
Yes. We agree that due to the Family Court's order pursuant to section 106B of the Family Law Act 1975 that sets aside the trust distributions, you can no longer be considered to have been presently entitled to those trust distributions.
Question 2
Are you required to include any income from the trust in your assessable income for the 20XX-XX and 20XX-XX income years under any provision within Division 6 of the ITAA 1936?
Answer
No. As the Family Court has ordered that the trust distributions be set aside, the trust distributions are not included in your assessable income under any provision within Division 6 of the ITAA 1936.
This ruling applies for the following periods:
Year ended 30 June 20XX
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You are an Australian resident for tax purposes.
In 20XX you and your spouse (ex-spouse) separated.
Court proceedings commenced in 20XX, regarding theproperty settlement.
You are a beneficiary and your ex-spouse is the principal family member of a discretionary trust.
During the 20XX-XX and 20XX-XX income years you received trust distributions from the trust.
Subsequently, the family law proceedings were settled.
The court ordered pursuant to section 106B of the Family Law Act 1975, that the distributions made to you by the trust be and are set aside. You provided a copy of this court order.
Relevant legislative provisions
Income Tax Assessment Act 1936 Division 6
Income Tax Assessment Act 1936 section 95A
Income Tax Assessment Act 1936 section 97
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