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Edited version of private advice
Authorisation Number: 1052005046588
Date of advice: 13 July 2022
Ruling
Subject: Deceased estate - subsection 99A(2) discretion
Question 1
Will the Commissioner exercise his discretion under subsection 99A(2) of the Income Tax Assessment Act 1936 (ITAA 1936) for the year ended 30 June 20XX?
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 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(s)
Year ended 30 June 20XX
The scheme commences on
1 July 20XX
Relevant facts and circumstances
The Deceased passed away some XXXX years ago.
The trust was established under the terms of the will of the Deceased. The will provided that the trustee set aside out of the Deceased's estate assets, certain amounts to be held on trust for the Deceased's two grandchildren until and subject to each grandchild attaining age 21.
The grandchildren are:
Grandchild A born some XX years ago, and
Grandchild B born some XX years ago
The only assets held by the trust were assets owned by the Deceased. No further capital has been introduced or contributed to the trust. The assets held by the trust are bank accounts, term deposits and Listed shares.
The trustee intends to accumulate rather than distribute any trust income to the beneficiaries to increase over time the available capital for the beneficiaries' benefit. When each beneficiary attains age 21, the trustee intends to transfer the assets set aside for each beneficiary to the respective beneficiary.
Relevant legislative provisions
Income Tax Assessment Act 1936 Subsection 99A(2)