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Edited version of private advice
Authorisation Number: 1051607379183
Date of advice: 12 November 2019
Ruling
Subject: Trust income - section 99
Question
Will the Commissioner exercise their 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 Estate. Accordingly, section 99 of the ITAA 1936 will apply to tax the trust estate at progressive individual rates.
This ruling applies for the following period:
Financial year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The trust estate was established in accordance with the will of X, who passed away on XX/XX/XXXX. Income was generated in the trust estate when the capital proceeds from the sale of their main residence were deposited into a bank account. The trustee has not made any beneficiary presently entitled to this interest income.
The trustee plans to make final distributions of the trust estate in the 20XX financial year.
The only assets held by the trust estate were those owned by the deceased. No further capital has been introduced or contributed to the trust estate. No loans have been made to and from the trust estate. No person has directly or indirectly transferred money or property to the trust estate.
Relevant legislative provisions
Income Tax Assessment Act 1936 section 99
Income Tax Assessment Act 1936 section 99A