Private ruling: Trusts - section 99A - discretion
Date of advice: 3 December 2025
Published: 27 January 2026
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Would the Commissioner exercise the discretion under subsection 99A (2) of the Income Tax Assessment Act 1936 (ITAA 1936) to tax the net income of the trust to which no beneficiary is presently entitled to, under section 99 of the ITAA 1936? | A1: Yes. After consideration of the relevant factors, we accept that the testamentary trust has not been utilised in a manner for the purpose of avoiding tax. 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 trust for the relevant income year. Accordingly, section 99 of the ITAA 1936 would apply.

Relevant facts and circumstances: The deceased passed away on XX/XX/20XX. The deceased had a Will dated XX/XX/20XX. Clause 2.1 of the deceased's Will states: In this Will the expression: "My son" means my son's name. "Qualifying age" in respect of any beneficiary means age twenty-seven (27) years. Clause 10.3 of the deceased's Will states: If my son survives me by thirty (30) days and attains the qualifying age, he shall be the primary beneficiary of a trust for one entire part. The following clauses detail the terms of Maintenance Trust for Beneficiaries under the Qualifying Age: 13.1 In respect of each of my beneficiaries under this Will who survive me but have not attained the qualifying age at the date of my death ("applicable beneficiary"), my executors shall hold each such applicable beneficiary's putative share of my estate on a separate trust and the following provisions will take precedence to the extent of any inconsistency over the other provisions of this Will. 13.2 My executors shall each financial year apply such of the net income, allocated net income or capital of each applicable beneficiary's trust as follows: i) allocate all or any part of the surplus to the maintenance of the applicable beneficiary; or ii) accumulate all or any part of the surplus. The trustee holds shares in a private company (the Private Company). The Private Company is a special purpose company according to ASIC with concessional annual renewal fee. It does not operate, but it acts solely as the trustee for the Family Superannuation Fund. The Private Company was incorporated on XX/XX/20XX with two (2) ordinary shares of $0 each. The only asset of the Private Company are only the $0 shares since incorporation till application for voluntary deregistration. The Private Company is currently in ASIC strike off action, after the submission of Form 6010 voluntary deregistration of a company on XX/XX/20XX and appropriate ASIC fee paid. The voluntary deregistration is only available when the company had under $1,000 worth of assets and had no liability. There was another company of the same name incorporated on XX/XX/20XX and was deregistered on XX/XX/20XX. The other company, which was the trustee of Other Family Super, was deregistered by ASIC after the super fund sole member passed away. Family Super was created on XX/XX/20XX and was wound up on XX/XX/20XX. Property held by the Trustee of the Trust (the Trustee) consists only of: (i) property listed in the Inventory of Property annexed to the Grant of Probate document that vested in the Trustee under the terms of the Last Will and Testament of the deceased individual; (ii) property that represents accumulations of income or capital from property that satisfies the requirement in (i); (iii) property from the sale of these assets of the Estate; and (iv) property from the re-investment of property that satisfies the requirement in (iii) The Estate receives four (4) categories of income, and it incurs the annual investment advice fee from the investment adviser. The categories of income are: • Interest income. • Distributions from public fixed trusts, with tax offsets. • Net capital gains from trust distributions, but the Estate has capital loss to absorb the net gains. • Net foreign income from trust distributions, with foreign tax credits. The deceased was not an object of a discretionary trust. The Trust has no unpaid present entitlements. The beneficiary of the Trust reached the qualifying age on XX/XX/20XX. The Trustee will accumulate income earned by the Trust in the relevant income year.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 99 | Income Tax Assessment Act 1936 section 99A | Income Tax Assessment Act 1936 subsection 99A (2)