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Edited version of private advice
Authorisation Number: 1052349477252
Date of advice: 28 January 2025
Ruling
Subject: Commissioner's discretion - deceased estate
Question 1
Will the Commissioner exercise his discretion under subdivision 99A(2) of the Income Tax Assessment Act 1936 (ITAA1936) to apply progressive individual rates of tax as per section 99 of the ITAA 1936?
Answer 1
Yes.
After consideration of the relevant factors, we accept that the estate has not been administered in a manner for the purpose of avoiding tax. The Commissioner is of the opinion that it would be unreasonable that section 99A of the ITAA 1936 should apply in relation to the trustee of the trust in the relevant income year. Accordingly, section 99 of the ITAA 1936 will apply.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
The individual (the deceased) was a resident of Australia for tax purposes.
In XX 19XX, the individual purchased a property (the property) in Australia as their main residence.
In 20XX, the individual travelled to country A. The individual went missing in country A.
According to country A's law, a person must be missing for XX years before being declared deceased.
From XX/XX/20XX, the property began earning rental income.
The individual was deemed deceased as at XX/XX 20XX, after seven years missing.
A copy of the death certificate states the final court decision declaring the individual legally deceased was XX/XX/20XX.
XX/XX20XX was the date notification was made of the court decision.
A Will was not filed by the deceased.
On XX/XX/20XX Letters of Administration were granted to the deceased's children.
Approximately XX months after Letters of Administration were granted, the property was listed for sale.
On XX/XX/20XX settlement occurred on the sale of the property.
The trust has only ever consisted of a property and cash that the deceased owned and funds resulting from those assets.
The estate will be finalised in the same financial year as the property was sold.
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)