Private ruling: Trust - section 99A
Date of advice: 4 November 2019
Published: January 2020
Ruling period: Year ending 30 June 2019 | Year ending 30 June 2020 | Year ending 30 June 2021 | Year ending 30 June 2022 | Year ending 30 June 2023 | Year ending 30 June 2024 | Year ending 30 June 2025 | Year ending 30 June 2026
Date scheme commenced: 1 July 2018

Ruling: Q1: Will the Commissioner exercise discretion under section 99A of the Income Tax Assessment Act 1936 (ITAA 1936) to tax the net income of the trust estate to which no beneficiary is presently entitled under section 99 of the ITAA 1936? | A1: Yes. After consideration of the relevant factors, the Commissioner is of the opinion that it would be unreasonable that section 99A of the ITAA 1936 should apply in relation to the testamentary trust. Accordingly section 99 of the ITAA 1936 will apply.

Relevant facts and circumstances: The Testamentary Trust was created by the will of Y who died on XX November 20XX. Under the will, X properties were left in trust for Y's X grandchildren until they reach the age of 21 years. Each grandchild was assigned a particular property and a proportionate share of the accumulated income conditional upon reaching 21 years old. The only assets of the trust are the properties and a bank account for banking rents and paying property expenses. The trust has no liabilities and each year the trustee will be assessed on the net rent as no beneficiary is presently entitled.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 99 | Income Tax Assessment Act 1936 Section 99A