Edited version of private advice

Authorisation Number: 1051843981436

Date of advice: 27 May 2021

Ruling

Subject: Section 99A - commissioners discretion

Question

Will the Commissioner exercise his discretion under subdivision 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 Income Tax Assessment Act 1936 (ITAA 1936) should apply in relation to that trust estate in relation to the relevant year of income. Accordingly, section 99 of the ITAA 1936 will apply.

This ruling applies for the following period:

Year ended 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

The Trust is a Testamentary trust established as a result of the direction under the will.

All assets of the Trust are those that devolved to the trustees under the will or that have been acquired from trust income or reinvestment of the deceased's assets.

Assets are currently held by the Trust.

Loans have been provided by the Trust to the beneficiaries of the Trust.

The funding of the loan was derived from the capital of the Trust.

The undistributed income is required to service the debt and maintain the property.

No other funds will be contributed to the Trust other than what will be received from the estate.

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)