Private ruling: Commissioner's discretion - testamentary trust
Date of advice: 26 July 2024
Published: 2 September 2024
Ruling period: 1 July 2023 to 30 June 2028
Date scheme commenced: 1 June 2021

Ruling: Q1: Will the Commissioner exercise his discretion to assess the Rulee in accordance with section 99 of the Income Tax Assessment Act 1936 (ITAA 1936) where no beneficiary is made presently entitled to the net income of the Rulee? | A1: Yes. The Rulee, a testamentary trust, has been established in accordance with the deceased's will. The Commissioner accepts that the factors adverse to granting the discretion listed in subsection 99A(3) of the ITAA 1936 are not present in the Rulee's case. The Commissioner will exercise his discretion to assess the Rulee under section 99 of the ITAA 1936 where no beneficiary is made presently entitled to the net income of the Rulee.

Relevant facts and circumstances: The deceased died on DD MM 20XX. Probate was granted on DD MM 20XX. The Rulee is the trustee of a testamentary trust created under the terms of the deceased's will. All the property of the Rulee: • had been transferred directly from the deceased estate to the Rulee; • constitutes one equal sixth of the property that was held by the deceased at the date of their death and was considered part of the 'remaining balance of the Estate', as per the directions of the will; and • has no special rights or privileges attached to it. In addition: • The Rulee has not made any loans to any beneficiaries. • The Rulee contains no unpaid present entitlements. No additional money or property has been transferred to the Rulee.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 99 | Income Tax Assessment Act 1936 section 99A | Income Tax Assessment Act 1936 subsection 99A(3)