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Edited version of private advice
Authorisation Number: 1051620879706
Date of advice: 13 December 2019
Ruling
Subject: Excepted Trust Income
Question
Will a prescribed person's share of the net income of the Trust derived from the investment of property received from the deceased estate of Person X be excepted trust income under subparagraph 102AG(2)(d)(i) of the Income Tax Assessment Act 1936 (ITAA 1936)?
Answer
Yes. Subsection 102AG(2) of the ITAA 1936 lists the various types of assessable income of the trust estate which are 'excepted trust income' in relation to the beneficiary of the trust estate.
After consideration of the facts and circumstances, the Commissioner considers that the Trust satisfies the conditions set out in subparagraph 102AG(2)(d)(i) of the ITAA 1936. Therefore, the income derived from the investment of property transferred into the Trust from the deceased estate is excepted trust income when it is distributed to the minor beneficiaries.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
Person A's last will contained a gift of 25% of their residuary estate to a Trust.
Person A died on XX/XX/XXXX and the administration of their deceased estate has been attended to by their executors. The Trust has received its gift from the deceased estate. Presently the gift is being held in the Trust's bank account earning interest.
The beneficiaries of the Trust include a grandchild of the deceased and their children, as well as their spouses, children, grandchildren, great grandchildren and parents.
The trustee of the Trust will make distributions of income generated from the property of the deceased estate to minor beneficiaries.
There was no agreement between the Trust and the deceased, or any other persons for the purpose of securing assessable income which would be considered as excepted trust income.
Relevant legislative provisions
Income Tax Assessment Act 1936 Subsection 102AG(2)
Income Tax Assessment Act 1936 Subparagraph 102AG(2)(d)(i)
Income Tax Assessment Act 1936 Subsection 102AG(3)
Income Tax Assessment Act 1936 Subsection 102AG(4)