Private ruling: Excepted trust income
Date of advice: 2 October 2018
Published: November 2018
Ruling period: Year ended 30 June 20xx | Year ending 30 June 20xx | Year ending 30 June 20xx | Year ending 30 June 20xx | Year ending 30 June 20xx
Date scheme commenced: 1 July 20xx

Ruling: Q1: Is the income of the Trust from the investment of proceeds paid out under a policy of life insurance and benefits paid out of a superannuation fund regarded as excepted trust income? | A1: Yes. Having considered the particular circumstances of the Trust and the relevant provisions, the income is regarded as excepted trust income under subparagraphs 102AG(2)(c)(iv) and (v) of the Income Tax Assessment Act 1936 . Therefore the trustee pays tax on the excepted trust income at normal individual income tax rates.


Relevant legislative provisions: Income Tax Assessment Act 1936 subsection 102AG(1) | Income Tax Assessment Act 1936 paragraph 102AG(2)(c) | Income Tax Assessment Act 1936 subsection 102AG(2A)


Relevant facts: Entity A has an infant child. Entity A was diagnosed with an incurable terminal medical condition. | Entity A was paid a terminal medical condition benefit from a superannuation fund and life insurance policy. | To ensure that the child would be adequately provided for a trust was established. | The intention of the settlor for the Trust was to provide a trust for the receipt of the superannuation and life insurance proceeds. | Entity A passed away as a result of the terminal medical condition. | Under the Trust Deed, the beneficiary acquired and is absolutely entitled to the Trust fund when the Trust vests or terminates.