Private ruling: Excepted person - disabled minor
Published: June 2012
Ruling period: Year ended 30 June 2012 | Year ended 30 June 2013 | Year ended 30 June 2014 | Year ended 30 June 2015 | Year ended 30 June 2016
Date scheme commenced: 1 July 2011

Ruling: Q1: Is the Australian resident minor beneficiary an excepted person for the purposes of Division 6AA of the Income Tax Assessment Act 1936 (ITAA 1936) and therefore assessable at general individual income tax rates for residents on income distributed from a trust? | A1: Yes

Relevant facts and circumstances: The person concerned is a beneficiary of the family trust. The trustee wishes to distribute income to the person concerned. The person concerned is a minor and is a resident of Australia for income tax purposes. The person concerned has been diagnosed with a disability. A Disability Support Payment is being paid to the person concerned and they will continue to receive the pension from Centrelink for the duration of the ruling.

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

Reasons for decision: Summary: Paragraph 102AC(2)(c)(i) of the ITAA 1936 applies to the person concerned and will give them the status of an excepted person. | Detailed Reasoning - Detailed reasoning: The person concerned is a minor. Therefore, they would normally be subject to the special rules of Div 6 AA of the ITAA 1936. Subsection 102AC(2) of the ITAA 1936 states that a minor is an excepted person in relation to a year of income if: (c) the minor is a person - (ii) to whom a disability support pension under that Act was payable in respect of a period that included the last day of the year of income; In this case, the minor has been diagnosed with a disability. A disability support payment is being paid by Centrelink in respect of this. Based on the information provided, it is considered that the requirements of subsection 102AC(2)(c)(ii) of the ITAA 1936 are satisfied and that the minor is therefore an excepted person, provided that the disability support payment will continue to be paid in respect of the minor for the duration of the period to which this ruling applies and that those payments will be payable in respect of the period that includes the last day of each year of income. Accordingly, the special rates of tax under Division 6AA of the ITAA 1936 will not apply to income derived by the taxpayer during the period to which this ruling applies and any income distributed from a trust will be assessable at general individual income tax rates for residents.

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