Private ruling: Commissioner's discretion under subparagraph 272-5(3) ITAA 1936
Published: April 2012
Ruling period: 1 July 2011 to 30 June 2015
Date scheme commenced: 12 March 2012

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 272-5(3) of Schedule 2F to the ITAA 1936 such that the beneficiaries of Trust A will have a fixed entitlement. | A1: Yes

Relevant facts and circumstances: The client is the trustee of Trust A. Trust A is a registered managed investment scheme under the Corporations Act. The Constitution of Trust A states that the Constitution is subject to the Corporations Act, ASX Listing Rules and the regulatory powers of ASIC. The Constitution provides all eligible unit holders with a vested interest to the income and capital of Trust A. The Constitution contains some clauses that may defease the interest of the unit holders. It is considered unlikely that the clauses that may cause the defeasance happening will occur.

Relevant legislative provisions: Subsection 272-5(3) of Schedule 2F to the ITAA 1936

Reasons for decision: Summary: After having regard to the factors contained in paragraph 272-5(3)(b) of Schedule 2F to the ITAA 1936, the Commissioner considers that the beneficiaries should be treated as having fixed entitlements to the income and capital of the trust.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.