Private ruling: Assessability of trust income
Published: June 2012
Ruling period: Year ended 30 June 2011 | Year ending 30 June 2012 | Year ending 30 June 2013 | Year ending 30 June 2014 | Year ending 30 June 2015
Date scheme commenced: 1 July 2010

Ruling: Q1: Will the Commissioner exercise his discretion under section 99A of the Income Tax Assessment Act 1936 (ITAA 1936) and assess the trustee of the Trust Fund under section 99 of the ITAA 1936? | A1: Yes.

Relevant facts and circumstances: The deceased passed away. The last Will prepared was dated just prior to death. Probate was granted. The fund is a resident trust with no beneficiary presently entitled. The trust will be in existence for a number of years until the main beneficiary reaches a specified age.

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

Reasons for decision: Summary: Commissioner's discretion to assess trustee under section 99 of the ITAA 1936 Under subsection 99A(2) of the ITAA 1936, where the trust estate resulted from a will and the Commissioner is of the opinion that it would be unreasonable for section 99A of the ITAA 1936 to apply, the Commissioner has the discretion to assess the trustee under section 99 of the ITAA 1936. The effect of subsection 99A(3A) of the ITAA 1936 when read with paragraph 99A(3)(a) of the ITAA 1936, is that in forming an opinion for the purposes of subsection 99A(2) of the ITAA 1936 in the case of a deceased estate, the Commissioner is required to have regard to the circumstances in which and the conditions, if any, upon which, at any time, property (including money) was acquired by, or lent to, the deceased person, income was derived by the deceased person, benefits were conferred on the deceased person or special rights or privileges were conferred on, or attached to, property of the deceased person, whether or not the rights or privileges were exercised. | Detailed Reasoning - Application to your circumstances: Based on the information you have provided in your application, the Commissioner will exercise his discretion and assess the trustee under section 99 of the ITAA 1936.

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