Private ruling: Commissioner's discretion - deceased estate
Date of advice: 10 November 2025
Published: 5 January 2026
Ruling period: Year ending 30 June 20YY
Date scheme commenced: XX June 20XX

Ruling: Q1: Will the Commissioner exercise the discretion under subsection 99A(2) of the Income Tax Assessment Act 1936 (ITAA 1936) to tax the trustee of the Estate on income that no beneficiary is presently entitled to under section 99 of the ITAA 1936? | A1: Yes. Having regard to the circumstances, and the legislated purpose of section 99A of the ITAA 1936 to prevent the use of trusts for tax avoidance, the Commissioner is of the opinion that it is unreasonable for section 99A to apply to the Estate in respect of the 20YY income year.

Relevant facts and circumstances: On XX XXXX 20XX the Deceased passed away. As at date of death: • The Deceased left a Will dated XX XXXX 20XX. The Will appointed Person A and Person B as co-executors of the Estate. The Beneficiaries were the Deceased's stepchildren, Stepchild 1 and Stepchild 2 (the Stepchildren) and a few other close relatives. • The Deceased owned the Property which was the main residence of the Deceased and was not being used to produce assessable income before they died. On XX XXXX 20XX, the Stepchildren filed a caveat questioning the Deceased's capacity to make the Will dated XX XXXX 20XX, alleging the Will was subject to a mutual will agreement made on or around XX XXXX 19XX. At a mediation held later in 20XX, the Stepchildren and the other relatives agreed that an independent administrator be appointed to administer the Estate. On XX XXXX 20XX, the Administrator was appointed by the Supreme Court. On XX XXXX 20XX, the Stepchildren filed and served on the Administrator a writ and statement of claim in relation to the mutual Will claim. On XX XXXX 20XX, the Court made orders adding the other relatives to the mutual Will proceeding. Due to an ongoing dispute between the Stepchildren and the other relatives as to whether the Property and chattels were to be sold or maintained, the Administrator applied to the Supreme Court on XX XXXX 20XX for directions. In XXXX 20XX and prior to the matter being heard, the Stepchildren and the other relatives agreed that the Property be sold. The Administrator took immediate steps to prepare the Property for sale, which included the distribution of contested chattels and placed the Property on the market in early XXXX 20XX. The Property was auctioned on XX XXXX 20XX. The Property settled on or around XX XXXX 20XX. Trust tax returns have been lodged for the income years up to and including the 20XX - 20XX year. The significant assets of the Estate are: • The Property. • A share portfolio which was disposed of in XXXX 20XX. • A self-managed superannuation fund. Other assets currently owned by the Estate have been called in by the Administrator. The income of the Estate is only derived from assets held or deemed to belong to the estate as at the date of death of the deceased. The Estate is subject to ongoing litigation with a trial commencement date of XX October 20XX. A Court determination was made on XX June 20XX. There were further Orders on XX August 20XX. The administration of the Estate has not occurred within three years of the Deceased passing away. No property has been, or will be, acquired by or intentionally lent to the Estate. No property was acquired by the Deceased prior to their passing for any purposes other than the enjoyment of the Deceased during their lifetime. There are no special rights or privileges attached to any property of the Estate. It is anticipated that the Estate will be fully administered during the ruling period.

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) | Income Tax Assessment Act 1936 subsection 99A(3 )