Private ruling: Commissioner's discretion
Date of advice: 16 January 2020
Published: March 2020
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 99A(2) of the Income Tax Assessment Act 1936 (ITAA 1936) to tax trustee on income that no beneficiary is presently entitled to under section 99 of the ITAA 1936? | A1: 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 trustee of the testamentary trust in the relevant income years. Accordingly section 99 of the ITAA 1936 will apply.

Relevant facts and circumstances: 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 a fund on trust for the deceased's grandchild. The trustee intends to accumulate rather than distribute any trust income to the beneficiary to increase over time the available capital of the trust fund for the beneficiary's benefit. The only assets held by the trust were those owned by the deceased. No further capital has been introduced or contributed to the trust. No loans have been made to and from the trust.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 99 | Income Tax Assessment Act 1936 Section 99A