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Edited version of your private ruling
Authorisation Number: 1012608223696
Ruling
Subject: A deceased estate
Question
Where the administration of the deceased estate is not completed is the trustee assessed on all the income derived in that year?
Answer:
Yes
This ruling applies for the following period:
Year ended 30 June 2013
Year ended 30 June 2014
The scheme commenced on:
On or after 1 July 2012
Relevant facts
The deceased passed away.
The administration of the estate is not yet complete.
Relevant legislative provisions
Income Tax Assessment Act 1936 section 101A
Income Tax Assessment Act 1936 section 95(1)
Income Tax Assessment Act 1936 section 99
Reasons for decision
Taxation Ruling IT 2622 deals with the issue of who is presently entitled to the income of the deceased estate during the stages of administration of the deceased estates.
During the period of administration in which no beneficiary will generally be presently entitled, the trustee of the estate will be taxed under section 99 of the ITAA 1936 for up to three tax years on any trust income derived. The trust income would normally be in the form of interest, rent, dividends, or net business income from the trustee's utilisation of the trust assets that have devolved on trustee following the taxpayer's death.
In this case, the estate has not yet been fully administered. Therefore it is the trustee and not the beneficiaries who are taxable on the net income of the trust estate.