Private ruling: Distributions of income from deceased's estate
Date of advice: 17 April 2024
Published: 27 May 2024
Ruling period: Year ended 30 June 20xx
Date scheme commenced: 1 July 20xx

Ruling: Q1: Will all distributions of income from the deceased's Estate be assessed to the beneficiaries of the Estate under section 97 of the Income Tax Assessment Act 1936 (ITAA 1936)? | A1: Yes. The administration of the Estate was completed by the end of the third income year after the death of the deceased, with the two residual beneficiaries notified of their entitlement by the end of two months after the third income year. Therefore, section 100AA of the ITAA 1936 will not apply to prevent the residual beneficiaries from being regarded as presently entitled and all distributions from the Estate will be assessed to the beneficiaries under section 97 of the ITAA 1936.

Relevant facts and circumstances: The deceased died, leaving an estate to be distributed to primary and residual beneficiaries. All assets of the deceased's Estate had been disposed of and all liabilities provided for by the end of the third income year after the death of the deceased (the third income year). All beneficiaries besides the two residual beneficiaries had received their distributions from the Estate in accordance with the deceased's will before the end of the third income year. The two residual beneficiaries were notified of their entitlement to the remaining funds held by the Estate, in accordance with the will of the deceased, in writing, before two months expired after the third income year. The two residual beneficiaries are exempt entities for taxation purposes.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 97 | Income Tax Assessment Act 1936 section 100AA