Private ruling: Trust Income -sections 99 and 99A
Date of advice: 3 October 2019
Published: November 2019
Ruling period: Year ended 30 June 20XX to Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner their 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 Trust. Accordingly section 99 of the ITAA 1936 will apply.

Relevant facts and circumstances: The Trust is a testamentary trust created under the will of the deceased. Under the terms of the will, the trust was created over the sum of $X for the benefit of the deceased's child. An amount was loaned to the Trust for a short period. The amount represented a small fraction of the trust capital. The loan was made in error. The loan has been repaid. No other loans have been made to or from the Trust. No person has directly or indirectly transferred money or property to the Trust. There are no other trusts that the named beneficiary or any beneficiary of the Trust has contributed to in any way. The Trustee has the discretion to retain and accumulate the income of the trust. During the relevant income years, the Trust has generated income to which no beneficiary is presently entitled.

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