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Edited version of private advice
Authorisation Number: 1052280600231
Date of advice: 26 July 2024
Ruling
Subject: Commissioner's discretion - testamentary trust
Question
Will the Commissioner exercise his discretion to assess the Rulee in accordance with section 99 of the Income Tax Assessment Act 1936 (ITAA 1936) where no beneficiary is made presently entitled to the net income of the Rulee?
Answer
Yes.
The Rulee, a testamentary trust, has been established in accordance with the deceased's will. The Commissioner accepts that the factors adverse to granting the discretion listed in subsection 99A(3) of the ITAA 1936 are not present in the Rulee's case. The Commissioner will exercise his discretion to assess the Rulee under section 99 of the ITAA 1936 where no beneficiary is made presently entitled to the net income of the Rulee.
This ruling applies for the following period:
1 July 2023 to 30 June 2028
The scheme commenced on:
1 June 2021
Relevant facts and circumstances
The deceased died on DD MM 20XX.
Probate was granted on DD MM 20XX.
The Rulee is the trustee of a testamentary trust created under the terms of the deceased's will.
All the property of the Rulee:
• had been transferred directly from the deceased estate to the Rulee;
• constitutes one equal sixth of the property that was held by the deceased at the date of their death and was considered part of the 'remaining balance of the Estate', as per the directions of the will; and
• has no special rights or privileges attached to it.
In addition:
• The Rulee has not made any loans to any beneficiaries.
• The Rulee contains no unpaid present entitlements.
No additional money or property has been transferred to the Rulee.
Relevant legislative provisions
Income Tax Assessment Act 1936 section 99
Income Tax Assessment Act 1936 section 99A
Income Tax Assessment Act 1936 subsection 99A(3)