Private ruling: Commissioner's discretion
Date of advice: 7 May 2020
Published: June 2020
Ruling period: Year ended 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 the 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 deceased's Will provided for the establishment of testamentary trusts, one of which is the subject of this ruling (the Trust). Under the terms of the Trust, the deceased's child is the Trustee and primary beneficiary. The Trustee expects that some distributions of income will be made to a minor grandchild of the deceased and to the Trustee in their capacity as primary beneficiary. Apart from these distributions, income will be accumulated in the Trust. The corpus of the Trust is formed entirely from assets of the deceased at the date of their death, which include real property, personal property, cash at bank and ordinary shares with no special rights attached. No other funds or property will be transferred to the Trust.

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