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Edited version of private advice
Authorisation Number: 1051604449828
Date of advice: 4 November 2019
Ruling
Subject: Trust - section 99A
Question
Will the Commissioner exercise discretion under section 99A of the Income Tax Assessment Act 1936 (ITAA 1936) to tax the net income of the trust estate 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 the testamentary trust. Accordingly section 99 of the ITAA 1936 will apply.
This ruling applies for the following periods:
Year ending 30 June 2019
Year ending 30 June 2020
Year ending 30 June 2021
Year ending 30 June 2022
Year ending 30 June 2023
Year ending 30 June 2024
Year ending 30 June 2025
Year ending 30 June 2026
The scheme commences on:
1 July 2018
Relevant facts and circumstances
The Testamentary Trust was created by the will of Y who died on XX November 20XX.
Under the will, X properties were left in trust for Y's X grandchildren until they reach the age of 21 years.
Each grandchild was assigned a particular property and a proportionate share of the accumulated income conditional upon reaching 21 years old.
The only assets of the trust are the properties and a bank account for banking rents and paying property expenses.
The trust has no liabilities and each year the trustee will be assessed on the net rent as no beneficiary is presently entitled.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 99
Income Tax Assessment Act 1936 Section 99A