Private ruling: A deceased estate
Published: March 2014
Ruling period: Year ended 30 June 2013 | Year ended 30 June 2014
Date scheme commenced: On or after 1 July 2012

Ruling: Q1: Where the administration of the deceased estate is not completed is the trustee assessed on all the income derived in that year? | A1: Yes


Relevant legislative provisions: Income Tax Assessment Act 1936 section 101A | Income Tax Assessment Act 1936 section 95(1) | Income Tax Assessment Act 1936 section 99

Reasons for decision: Summary: Taxation Ruling IT 2622 deals with the issue of who is presently entitled to the income of the deceased estate during the stages of administration of the deceased estates. During the period of administration in which no beneficiary will generally be presently entitled, the trustee of the estate will be taxed under section 99 of the ITAA 1936 for up to three tax years on any trust income derived. The trust income would normally be in the form of interest, rent, dividends, or net business income from the trustee's utilisation of the trust assets that have devolved on trustee following the taxpayer's death. In this case, the estate has not yet been fully administered. Therefore it is the trustee and not the beneficiaries who are taxable on the net income of the trust estate.

Relevant facts: The deceased passed away. | The administration of the estate is not yet complete.