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Edited version of private advice
Authorisation Number: 1052075251813
Date of advice: 10 January 2023
Ruling
Subject: Commissioner's discretion - section 99A
Question
Will the Commissioner exercise his 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 trust estate in 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 Deceased died some years ago.
Their will provided for the establishment of a testamentary trust for their child (the Trust).
The Trust property consists of a term deposit.
The Trust has made approximately $XX of taxable income in the income year ending 30 June 20XX.
All assets of the Trust are those that devolved to the trustee under the will.
Assets are currently held by the Trust.
The named beneficiary of the Trust is not entitled to the income of the Trust until they reach the age of XX
Relevant legislative provisions
Income Tax Assessment Act 1936 section 99
Income Tax Assessment Act 1936 section 99A