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Edited version of private advice
Authorisation Number: 1051494292035
Date of advice: 28 May 2019
Ruling
Subject: Deceased estate, sections 99 and 99A(2)
Question
Will the Trustee be assessed under section 99 on the net income of the Estate where no part of the income is paid to a beneficiary before the administration of the Estate is completed?
Answer
Yes, after consideration of all 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 for the relevant years of income. Accordingly section 99 of the ITAA 1936 will apply.
This ruling applies for the following period:
1 July 2014 to 30 June 2019
The scheme commences on:
1 July 2014
Relevant facts and circumstances
The deceased passed away in 20XX, leaving the last Will dated 20XX (a copy of the Will and the probate has been provided).
Following a dispute between the executor of the Estate and the Trustee regarding the entitlements of the deceased's partner under the Will delays were experienced.
Under the Will, each Testamentary Trust is a beneficiary of an equal share of the residue of the Estate after specific entitlements and gifts are dealt with.
The capital of the Estate is sufficient to settle the beneficiaries' entitlements payable under the Will.
Details of the assets of the Estate were provided.
The Estate has not distributed income to the Testamentary Trusts.
The Estate is under administration and the residue of the Estate is yet to be determined.
Part of the Will specifically directs net profits from the sale of real estate to be reinvested as part of the residue of the Estate.
Relevant legislative provisions
The Income Assessment Act 1936 section 99
The Income Assessment Act 1936 section 99A
The Income Assessment Act 1936 section 99A(2)