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Edited version of private advice
Authorisation Number: 1051622017348
Date of advice: 18 December 2019
Ruling
Subject: Trust Income - Excepted Trust Income
Question
Will distributions made to a minor beneficiary of the Trust be 'excepted trust income' for the purposes of section 102AG of the Income Tax Assessment Act 1936 (ITAA 1936)?
Answer
Yes, provided the minor beneficiary is not an excepted person as defined in subsection 102AC(2) of the ITAA 1936.
Excepted trust income is defined in subsection 102AG(2) of the ITAA 1936 and includes an amount that is assessable income of a trust estate that resulted from an intestacy or an order of a court that varied or modified the application, in relation to the estate of a deceased person, of the provisions of the law relating to the distribution of the estates of persons who die intestate. The Trust resulted from an intestacy therefore any income that the Trust distributes to the minor beneficiary (who is not an excepted person) will be excepted trust income.
This ruling applies for the following periods:
Year ended 30 June 2018 to year ending 30 June 2027
The scheme commences on:
1 July 2017
Relevant facts and circumstances
The deceased died intestate.
Letters of administration were granted on XX/XX/XXXX on the basis of being for the use and benefit of Person X until they attain the age of 18 years. Person X is the deceased's minor child.
The Trust will distribute income of the Trust estate to Person X for their use and benefit until they attain the age of 18 years.
The Trust consists of assets solely as a result of the death of the deceased.
Relevant legislative provisions
Income Tax Assessment Act 1936 Division 6AA
Income Tax Assessment Act 1936 Section 102AC
Income Tax Assessment Act 1936 Section 102AG
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