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Edited version of private advice
Authorisation Number: 1051836895634
Date of advice: 11 May 2021
Ruling
Subject: Commissioner's discretion under section 99A
Question
Will the Commissioner exercise his discretion under subsection 99A(2) of the Income Tax Assessment Act 1936 (ITAA 1936) to apply progressive individual rates of tax as per section 99 of the ITAA 1936?
Answer
Yes. After consideration of the relevant factors, the Commissioner is of the opinion that it would be unreasonable that section 99A of the ITAA 1936 should apply in relation to the trust estate in relation to the relevant years of income. Accordingly, section 99 of the ITAA 1936 will apply.
This ruling applies for the following period periods:
Year ending 30 June 2022
The scheme commences on:
1 July 2021
Relevant facts and circumstances
The deceased died and administration of the estate commenced to be administered according to the deceased's will.
There were delays in administering the estate because of the following issues:
• The estate's solicitor advised that the estate was likely to be challenged so distributions of any estate assets were prohibited in the first 12 months
• Notification was subsequently received that the estate was being challenged by the deceased's former spouse
• The estate went into mediation and final court orders were made some months later
• As a result of the orders, a distribution was to be made to the deceased's former spouse which had to be funded out of the liquidation of assets of the estate
• The payment was to take place over two instalments and was completed some months after the orders were made. This had to be completed as a priority before any other distributions could be made
• Additionally, a Deed of Family Arrangement was reached between beneficiaries of the estate.
The above matters had to be finalised before any further distribution of the estate could occur.
Now that the necessary agreements between the beneficiaries have been reached, the executors are now able to continue with finalising the administration of the estate.
No other funds from outside the deceased estate will be brought into the estate.
The trust has not borrowed or lent any money.
No special rights or privileges have been conferred or attached to the assets of the deceased estate.
Relevant legislative provisions
Income Tax Assessment Act 1936 section 99
Income Tax Assessment Act 1936 section 99A
Income Tax Assessment Act 1936 subsection 99A(2)
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