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Edited version of private advice
Authorisation Number: 1052115391178
Date of advice: 5 May 2023
Ruling
Subject: Commissioner's discretion
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 to which no beneficiary is presently entitled, under section 99 of the ITAA 1936, for the Testamentary Trust?
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 period:
Year ending 30 June 20XX
The scheme commenced on:
XX April 20XX
Relevant facts and circumstances
The deceased passed away on XX April 20XX.
The testamentary trust was established under the will of the deceased.
On XX May 20XX, a corporate trustee was incorporated and there was a change in trustee from the Trustee to the corporate trustee. The former trustee is the sole director of the corporate trustee.
It is intended that the testamentary trust will retain the profits generated by the trust, be subject to tax, and re-invest the net proceeds in the trust.
There are no special rights or privileges that attach to any assets of the testamentary trust.
The testamentary trust has not made or received any loans.
No money or property, other than from the deceased estate, has been transferred to the testamentary trust.
Relevant legislative provisions
Income Tax Assessment Act 1936 section 99
Income Tax Assessment Act 1936 section 99A
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