Private ruling: Section 99 Discretion
Date of advice: 24 June 2020
Published: July 2020
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX | Year Ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 99A(2) of the Income Tax Assessment Act 1936 (ITAA 1936) to tax the trustee on income that no beneficiary is presently entitled to 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 trustee of the testamentary trust in the relevant income years. Accordingly, section 99 of the ITAA 1936 will apply. Note: The tax rate for the first three years is the individual rate with a tax-free threshold applied, for the year ended 30 June 20XX the individual rate without a tax-free threshold applies.

Relevant facts and circumstances: The deceased) passed away in Spring 20XX. Probate of the will was granted in late 20XX. The will provided for the establishment of a testamentary trust, which is the subject of this ruling (the Trust). Under the terms of the Trust, the deceased's child is the primary beneficiary. The other beneficiary of the will had attained the vesting age and therefore is not a beneficiary of this testamentary trust. The Trustee expects that income will be accumulated in the Trust. The corpus of the Trust is formed entirely from assets of the deceased at the date of death. No other funds or property will be transferred to the Trust.

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