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Edited version of private advice
Authorisation Number: 1051805884772
Date of advice: 16 February 2021
Ruling
Subject: Resident trust estate
Question
Is the estate a resident trust estate for the purpose of determining net income in section 95 of the Income Tax Assessment Act 1936 (ITAA 1936)?
Answer
Yes.
Subsection 95(2) of the ITAA 1936 provides that a trust estate shall be taken to be a resident trust estate for the purposes of Division 6 of Part III of the ITAA 1936 in relation to an income year if a trustee of the trust estate was a resident at any time during the year of income, or the central management and control of the trust estate was in Australia at any time during the year of income. In this case, two out of the three trustees are residents and it is considered the central management and control of the estate is in Australia (factors provided in Taxation Ruling TR 2018/5: Income tax: central management and control test of residency).
This ruling applies for the following periods:
Years ending 30 June 20XX to 30 June 20XX
The scheme commences on:
X June 20XX
Relevant facts and circumstances
On X June 20XX the deceased passed away having made their will on XX August 20XX. The will appointed Individual A, Individual B and Individual C as the executors.
On XX February 20XX Probate of the Will was granted to the executors.
The estate of the deceased is a trust within the meaning of section 6(1) of the ITAA 1936. The executors are also the trustees.
Both Individual A and Individual B are residents in Australia and for Australian tax purposes. Individual C is a resident of a foreign country and not a resident for Australian tax purposes.
All assets of the trust estate are in Australia.
Meetings of the trustees predominantly take place via electronic channels, however, when the trustees have met in person for the purpose of progressing administration of the trust estate, this has occurred in Australia.
The lawyers of the trust estate are located in Australia. The trustees have instructed and taken advice in relation to the trust estate from the lawyers.
Records of proceedings of the administration of the trust estate are prepared and kept in Australia. Court documents relevant to litigation involving the trust estate are filed in Courts in Australia.
Relevant legislative provisions
Section 95 of the Income Tax Assessment Act 1936