Private ruling: Trust Income – excepted trust income
Date of advice: 27 September 2018
Published: November 2018
Ruling period: Financial year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is the income of the trust excepted trust income under section 102AG of the Income Tax Assessment Act 1936 (ITAA 1936) ? | A1: Yes. It is considered that the income of trust is excepted trust income as subparagraph 102AG(2)(c)(v) of the ITAA 1936 applies to the extent that the funds in the trust are directly as the result of the death of a person and out of their superannuation fund. The Commissioner is also satisfied that section 102AG(2A) of the ITAA 1936 is satisfied where the beneficiary will acquire the trust property when the trust ends. Further information on excepted trust income can be found by searching 'QC 16509' on ato.gov.au .

Relevant facts and circumstances: The deceased of Individual A passed away on XX/XX/20XX. Individual A is under the age of 18 is beneficiary of the deceased’s superannuation. The superannuation funds are currently held in a bank account with Individual B as the trustee. A Trust has been established and the superannuation funds will be transferred to the Trust. The Trust has the intention of purchasing a property where Individual A and his family will live. The Individual B will pay market rate rent to the Trust and any profits will be distributed solely to Individual A. The Trust deed has been considered as part of this application.

Relevant legislative provisions: Income tax Assessment Act 1936 section 102AG | Income tax Assessment Act 1936 subparagraph 102AG(2)(c)(v) | Income tax Assessment Act 1936 subsection 102AG(2A)