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Edited version of private advice
Authorisation Number: 1052114398386
Date of advice: 5 May 2023
Ruling
Subject: Commissioner's discretion - section 99A
Question
Will the Commissioner exercise the discretion under subsection 99A(2) of the Income Tax Assessment Act 1936 (ITAA 1936) to tax the net income of the trust to which no beneficiary is presently entitled under 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 that trust estate in relation to the relevant year of income. Accordingly, section 99 of the ITAA 1936 will apply.
This ruling applies for the following periods:
Year ended 30 June 20xx
Year ended 30 June 20xx
Year ended 30 June 20xx
Year ended 30 June 20xx
Year ending 30 June 20xx
The scheme commenced on:
1 July 20xx
Relevant facts and circumstances
The deceased passed away in 20xx.
Under the will of the deceased the beneficiaries are not entitled to a vested interest in the estate until they reach the age specified in the will.
The estate has no loans outstanding. However, on xx xxxx 20xx the Estate borrowed money from Beneficiary 2 to repay a bank loan in connection with a property purchased by the deceased in their lifetime. The loan from Beneficiary 2 was repaid by the Estate on xx June 20xx with interest.
There have been no assets transferred into the Estate since its establishment.
There are no special rights or privileges attached to the property of the Estate.
Beneficiary 1 was born on xx xxxx 19xx and Beneficiary 2 was born on xx xxxx 19xx.
Beneficiary 1 and Beneficiary 2 will reach the age specified in the will in the financial years ending 20xx and 20xx respectively.
Relevant legislative provisions
Income Tax Assessment Act 1936 section 99
Income Tax Assessment Act 1936 section 99A
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