Private ruling: Trust Income - Excepted Trust Income
Date of advice: 18 December 2019
Published: March 2020
Ruling period: Year ended 30 June 2018 to y ear ending 30 June 202 7
Date scheme commenced: 1 July 2017

Ruling: Q1: Will distributions made to a minor beneficiary of the Trust be 'excepted trust income' for the purposes of section 102AG of the Income Tax Assessment Act 1936 (ITAA 1936)? | A1: Yes, provided the minor beneficiary is not an excepted person as defined in subsection 102AC(2) of the ITAA 1936. Excepted trust income is defined in subsection 102AG(2) of the ITAA 1936 and includes an amount that is assessable income of a trust estate that resulted from an intestacy or an order of a court that varied or modified the application, in relation to the estate of a deceased person, of the provisions of the law relating to the distribution of the estates of persons who die intestate. The Trust resulted from an intestacy therefore any income that the Trust distributes to the minor beneficiary (who is not an excepted person) will be excepted trust income.

Relevant facts and circumstances: The deceased died intestate. Letters of administration were granted on XX/XX/XXXX on the basis of being for the use and benefit of Person X until they attain the age of 18 years. Person X is the deceased's minor child. The Trust will distribute income of the Trust estate to Person X for their use and benefit until they attain the age of 18 years. The Trust consists of assets solely as a result of the death of the deceased.

Relevant legislative provisions: Income Tax Assessment Act 1936 Division 6AA | Income Tax Assessment Act 1936 Section 102AC | Income Tax Assessment Act 1936 Section 102AG