Private ruling: Whether a beneficiary is an “excepted person”
Date of advice: 30 June 2017
Published: October 2017
Ruling period: Year ending 30 June 2017 | Year ending 30 June 2018 | Year ending 30 June 2019 | Year ending 30 June 2020 | Year ending 30 June 2021
Date scheme commenced: 1 July 2016

Ruling: Q1: Is the minor beneficiary of the Trust an “excepted person” as outlined under section 102AC of the Income Tax Assessment Act 1936 (ITAA 1936)? | A1: Yes

Relevant facts and circumstances: The Trust (trust) is a discretionary trust. A beneficiary of the trust is a minor. A general practitioner has supplied a letter which states that the beneficiary is a disabled child within the meaning of Part 2.19 of the Social Security Act 1991 .

Relevant legislative provisions: Section 102AC of the Income Tax Assessment Act 1936

Reasons for decision: Summary: Division 6AA of the ITAA 1936 applies to a person who is a “prescribed person” in relation to a year of income. A person is a “prescribed person” in relation to a year of income if that person is less than 18 on the last day of the year and is not an “excepted person” in relation to the year. Thus all persons under 18 (referred to as minors) are within the scope of Division 6AA, unless they fall within one or other of the categories of “excepted person” specified in section 102AC(2) of the ITAA 1936. The beneficiary is a minor and would normally be subject to the special rules of Div 6 AA of the ITAA 1936. However, subparagraph 102AC(2)(d)(i) of the ITAA 1936 in part states a person is an excepted person in relation to a year of income for the purposes of Division 6AA if, and only if, the Commissioner has received a certificate issued by a legally qualified medical practitioner certifying that the minor is a disabled child within the meaning of Part 2.19 of the Social Security Act 1991. In this case a general practitioner, has supplied a letter which states the beneficiary qualifies as a disabled child within the meaning of Part 2.19 of the Social Security Act 1991 . The beneficiary meets the definition of an “excepted person” under Section 102AC of the ITAA 1936.