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Edited version of private advice
Authorisation Number: 1051562086534
Date of advice: 12 August 2019
Ruling
Subject: Commissioner's consideration of whether section 99A rates should apply - lengthy process through the courts by one of the potential beneficiaries
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 that 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 periods:
1 July 2004 to 30 June 2020
The scheme commences on:
1 July 2001
Relevant facts and circumstances
The deceased owned some real property and other assets.
The will of the deceased gave all of their estate to be divided equally between certain of their relations.
One of the potential beneficiaries began a lengthy court process which would affect whether they would benefit from the estate of the deceased.
The delay in the administration of the estate arose from:
· establishing what assets the deceased still owned as at their time of death, referred to in documents in their possession at the time
· legal proceedings by the individual in the courts until all legal avenues had been exhausted.
Now that the final application has been unsuccessful, the individual is no longer a beneficiary of the taxpayer.
The administration of the estate is still incomplete and there are no presently entitled beneficiaries. The income tax returns for the taxpayer are currently being prepared.
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)