Private ruling: Commissioner's discretion
Date of advice: 1 June 2026
Published: 17 August 2026
Ruling period: 1 July 20YY to 30 June 20YY
Date scheme commenced: 1 July 20YY

Ruling: Q1: To the extent that the Trustee for the XXXX (the Trustee of the Trust) is assessable and liable to pay tax on the net income of the Trust will the Commissioner exercise the discretion, in subsection 99A(2) of the Income Tax Assessment Act (ITAA 1936), to assess the Trustee at the tax rate declared by the Parliament applicable to section 99 (rather than the tax rate applicable to section 99A)? | A1: Yes.

Relevant facts and circumstances: 1. The Trust was established from the Will (the Will). 2. XXXX (the Deceased) died on DD MM 20XX 3. The Will of the Deceased was signed on DD MM 20XX. 4. The following documents and information provided with the private ruling request: • Private ruling application • Probate of XXXX 5. Contained within the Private ruling application the following information was provided: • Administration of the Deceased's estate (the Deceased Estate) was finalised during the 20XX financial year and relevant funds invested in the name of the testamentary trust. • Tax agent advised that they are of the view that XXXX is not presently entitled to the income of the Trust, this is because it is up to sole discretion of the Trustees as to whether a distribution of income or Capital may be made to XXXX and upon death of XXXX, the residual of the trust will be paid to the deceased's XXXX, rather than to XXXX estate. • The Tax returns have been lodged for each of the 20XX, 20XX and 20XX financial years for the Trust, and it appears as though the Trustee has been assessed under section 99A of the ITAA 1936 in each year. • No additional funds have been introduced to the Trust since its inception, other than the original bequest from the Deceased estate. • The Trust has not loaned money to any person, nor has it loaned money from any person. • The funds are invested in a managed portfolio with the assistance of a financial planner. 6. The Will establishes the following for the Trust, trustees and the manner of execution: • Clause 1 stipulates that XXXX and XXXX are appointed to be the trustees (i.e., the Executors of the Deceased Estate). • As stated in Clause 1, XXXX is the deceased's solicitor and XXXX is the Deceased's XX. • Under direction of the Will Clause XX establishes the requirement to create the Trust. • Per Clause XX of the Will XX XX of the Deceased Estate was set aside for the benefit of XXXX. • Per the Will, Subclause XX outlines; until the distribution date to pay apply or set aside such part of the capital and or income thereof to or for the benefit of the Deceased's XX the said XXXX in such portions and in such manner as the Trustees shall (subject to the discretion criteria herein referred to) in the Trustee's sole and absolute discretion determine and the Trustee's shall not be bound to assign any reason therefor. • Subclause XX states; upon the distribution date to pay apply and distribute the whole the Trust fund then remaining (if any) to and for the benefit of until the deceased's great niece the said XX. • Per Clause XX for the purpose of the provisions of Clause XX hereof: (a) the Distribution date" means the date of death of my XXXX the said XXXX unless the Trust fund has been fully distributed prior to that date in which case the Trust shall determine; (b) the Discretions criteria means in relation to the provisions of sub-clause XX hereof "Discretion Criteria" means that notwithstanding the provisions of sub-clause XX hereof my Trustees shall distribute to my XX the said XX as much of the income of the Deceased's Trust fund as is required to care for and maintain XX in the manner to which XX has been accustomed during my lifetime which shall include the purchase of a residence anywhere in Australia if in the opinion of my Trustee's that is a viable option and which shall also include the seeking of professional advice as to the Deceased's said niece's disability. • Per Clause XX of the Will, the Trustees are authorised in their absolute and unfettered discretion to either retain the whole or any part of the estate in the same state or form of investment it is in as at the date of my (the Deceased's) death or alternatively to sell call in and convert the same or any part thereof into money and to invest the net proceeds of such sale calling in and conversion to investments authorised by law. • Per Clause XX of the Will the Trustees are empowered to appropriate or partition any real or personal property forming part of my (the Deceased's) estate to or towards the share of any person or persons therein under the trusts hereinbefore contained and to charge any share with such sums by the way of equality or partition as they may think fit and for such purposes to fix the value of any real or personal estate so appropriated as they shall think fit and every such valuation appropriation and partition shall be binding upon all person interested under this my (the Deceased's) Will. • Per Clause XX any Trustee or executor of this Will being a Solicitor or other person engaged in any profession or business may be so employed and shall be entitled to charge and be paid all usual professional and other charges for any work done by XX or XX firm in the proving of this Will and in the general administration of my (the Deceased's) estate. 7. On DD MM 20XX, ATO case officer contacted Tax agent XXXX to advise they had received their private ruling request and would issue an acknowledgement letter and that would draft a Further information request (FIR). 8. On DD MM 20XX, the ATO Issued the acknowledgment letter to tax agent via Email. 9. On DD MM 20XX, the ATO issued an FIR to the Tax agent via Email 10. On DD MM 20XX, the Tax agent responded to the FIR response via email. 11. The information contained within the response to the FIR is as follows: • The assets held by the Trust during the income years ended 30 June 20XX, 20XX and 20XX were: i. XXXX investment ii. XXXX cash investments iii. XXXX investment(s) iv. XXXX investment(s) v. XXXX investment(s) vi. XXXX investment(s) • The property of the Trust during the income years ended 30 June 20XX, 20XX and 20XX only consist of the following: vii. Property vested in the Trustee (that was vested in in the executor of the Will and listed in the inventory of property annexed to the grant of Probate documents under the terms of the Will; viii. Property that represents accumulations of income or capital from property that satisfies the requirements in (i); ix. Property from the Sales of those assets of the Trust; and x. Property from the reinvestment of Property that satisfies the requirements in (iii) • The Property of the Trust did not consist of assets other than those listed above. • During the income years ended 30 June 20XX, 20XX and 20XX the Property of the Trust did not consist of the following: xi. Shares in private companies or units in any private trusts; xii. Other property acquired at non-arm's length value; and xiii. Loans provided to related parties. • During the income years ending 30 June 20XX, 20XX, and 20XX the property of the Trust consisted of only: xiv. widely held/listed investments; or xv. cash investments. • No person at any time has directly or indirectly transferred or lent any property (including money) to the Trust. • No person at any time has directly or indirectly transferred or lent any property (including money) to another Trust. • The Trustee does not hold shares, units or other similar interests that carry rights to receive discretionary distributions or income or capital. • The Trustee does not receive income or capital in connection with these shares, units or other similar interests. • The Trustee is not a discretionary object in relation to another Trust. • The Trustee does not receive a distribution in relation to its status as a discretionary object in relation to another Trust. • No person at any time, has directly or indirectly, conferred or attached any special right or privilege, or done any act or thing, either alone or together with another person or persons, that has resulted in the conferring or attaching of any special right or privilege, on or to property of any trust whether or not the right or privilege, on or to property of the Trust whether or not the right or privilege has been exercised. • No person at any time has directly or indirectly conferred any benefits on the Trust. • No person at any time directly or indirectly, conferred any benefits on another trust. Assumptions 12. Throughout the ruling period: a) The Trust deed will not be amended b) The Property of the Trust will consist only of: i. Property vested in the Trustee (that was vested in the executor of the Will and listed in the Inventory of property annexed to the Grant of Probate document) under the terms of the Will of the deceased individual; ii. Property that represents accumulations of income or capital from property that satisfies the requirement in (i); iii. Property from the sale of these assets of the Trust; and iv. Property from the re-investment of property that satisfies the requirement in (iii). c) The assets of the Trust will consist only of: v. Public company shares or other direct, or indirect, interests in widely-held entities; vi. Australian real property; and vii. Cash d) The Distributions of income to the beneficiaries of the Trust will be paid out, or applied, to the relevant beneficiary within 2 years of the end of the relevant income year. e) The Trustee will administer the Trust in a conventional manner and not as a tax avoidance device. f) The Trustee will not enter into arrangements beyond the purpose for which section 99 of the ITAA 1936 was retained or of a type that the Commissioner will seek to discourage.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 99 | Income Tax Assessment Act 1936 section 99A | Income Tax Assessment Act 1936 subsection 99A(2) | Income Tax Assessment Act 1936 paragraph 99A(2)(a) | Income Tax Assessment Act 1936 subparagraph 99A(2)(a)(ii) | Income Tax Assessment Act 1936 subsection 99A(3) | Income Tax Assessment Act 1936 paragraph 99A(3)(a) | Income Tax Assessment Act 1936 paragraph 99A(3)(b) | Income Tax Assessment Act 1936 paragraph 99A(3)(c) | Income Tax Assessment Act 1936 subsection 99A(3A)

Reasons for decision: Detailed Reasoning - The relevant legislation: Under Subsection 99A(2) of the ITAA 1936, section 99A will not apply to the net income of a resident trust estate retained by certain trust estates where the '... Commissioner is of the opinion that it would be unreasonable that this section should apply in relation to that trust estate in relation to that year of income...' Instead section 99 of the ITAA 1936 will apply to that net income such that the net income of the trust will be taxed at the progressive rates applicable to certain individuals rather than at the flat top marginal tax rate (although, the availability of the tax free threshold is only available to trustees of trusts where the relevant person died less than 3 years before the end of the relevant year of income). In exercising the discretion, the commissioner will have reference to the text of the legislation itself, the intent or purpose of the legislation and relevant case law as they apply to the facts and circumstances of a particular case for the purpose of forming the required opinion under subsection 99A(2) of the ITAA 1936. The types of trust estate in respect of which the Commissioners discretion may be exercised are listed in paragraphs 99A(2)(a) to (d) of the ITAA 1936 and include a trust estate that resulted from a will (paragraph 99A(2)(a)). In forming the opinion for the purposes of subsection 99A(2) of the ITAA 1936 the commissioner is required to have regard to the matter subsections 99A(3) and (3A). These provide: 99A(3) In forming an opinion for the purposes of subsection (2): (a) the Commissioner shall have regard to the circumstances in which and the conditions, if any, upon which, at any time, property (including money) was acquired by or lent to the trust estate, income was derived by the trust estate, benefits were conferred on the trust estate or special rights or privileges were conferred on or attached to property of the trust estate, whether or not the rights or privileges have been exercised; (b) if a person who has, at any time, directly or indirectly: (i) transferred or lent any property (including money) to, or conferred any benefits on, the trust estate; or (ii) conferred or attached any special right or privilege, or done any act or thing, either alone or together with another person or persons, that has resulted in the conferring or attaching of any special right or privilege, on or to property of the trust estate whether or not the right or privilege has been exercised; has not, at any time, directly or indirectly: (iii) transferred or lent any property (including money) to, or conferred any benefits on, another trust estate; or (iv) conferred or attached any special right or privilege, or done any act or thing, either alone or together with another person or persons, that has resulted in the conferring or attaching of any special right or privilege, on or to property of another trust estate, whether or not the right or privilege has been exercised; the Commissioner shall have regard to that fact; and (c) the Commissioner shall have regard to such other matters, if any, as he or she thinks fit. 99A(3A) For the purposes of the application of paragraph (3)(a) in relation to a trust estate of the kind referred to in paragraph (2)(a), a reference in that first-mentioned paragraph to the trust estate shall be read as including a reference to the person as a result of whose death the trust estate arose. | Detailed Reasoning - Purpose of Section 99A of the ITAA 1936: Section 99A of the ITAA 1936 was introduced by the Income Tax and Social Services Contributions Assessment Act (No. 3) 1964 [1] . In its original form, it did not apply to deceased estates. When section 99A of the ITAA 1936 was amended in 1979 to apply to deceased estates, the EM to the Income Tax Assessment Amendment Bill (No. 6) 1979 stated (in relation to the exercise of the discretion in subsection 99A(2) The criteria that the Commissioner is to use in considering whether it would be unreasonable that section 99A of the ITAA 1936 should apply in these cases will remain essentially the same as at present (sub-section 99A(3)). This will enable the result that, unless there are tax avoidance connotations, accumulating income in these cases will continue to be taxed under section 99, on the same basis as at present. (Because there had been tax avoidance exploitation of an earlier exclusion of deceased estates from the ambit of section 99A, those estates were, by section 6 of the Income Tax Assessment Amendment Act (No. 2) 1977 , in that year brought within its scope.) [Note to Clause 13] [Emphasis added] In the High court case of Giris Pty Ltd V. Federal Commissioner of Taxation [2] (Giris) Windeyer J described the purpose of section 99A of the ITAA 1936 as: That purpose I take it is to enable the Commissioner to keep s. 99A as an instrument to prevent avoidance of taxation by the medium of trusts, but not to use it when to do so would seem to him not in accordance with that purpose. [at 384] This view was confirmed by Stephen J in the High court case of Perron (as trustee for the L.M Brennan Trust) v. Federal Commissioner of taxation [3] The views of Windeyer J. in the Giris case regarding the legislative purpose given effect to by sec. 99A(2) have already been quoted in the Commissioner's letter. I would, with respect, adopt those views of that legislative purpose. [at 4171] Therefore, it is reasonable to conclude that the purpose of section 99A of the ITAA 1936 is to prevent the use of trusts to avoid tax. The language of the text contained in section 99A of the ITAA 1936, and case law confirms that the type of tax avoidance at which section 99A is directed is broader than the facilitated by the use of multiple trusts. Inn Giris, the High court commented that: • ' ... the discretion is wide and though being really legislative in nature, what is relevant to its formation may range over an extremely wide spectrum of fact and consideration ...' [per Barwick J., at 374] • 'Here the Commissioner's discretion is apparently at large... I assume that [the Commissioner] is to be guided and controlled by the policy and purpose of the enactment, so far as that is manifest in it. ... ' [Per Windeyer J., at 384] | Detailed Reasoning - ATO Guidance: Public information bulleting PIB No. 4: Income of a trust estate to which no beneficiary is presently entitled was published by the ATO in April 1965 Although PIB No. 4 is considered to be relevant when considering the way in which the commissioner considers the exercise of the discretion in subsection 99A(2) of the ITAA 1936 its relevance is diminished due to events subsequent to its issues such as: • Legislative amendments to section 99A; and • Court and Board of Review decisions on s 99A(2). For instance, the commissioner is required to consider the matters in subsections 99(3) and 99(3A) of the ITAA 1936 in forming his opinions for the purposes of the discretion in subsection 99A(2). It is noted that subsection 99(3A) was inserted into the ITAA 1936 in 1980. | Detailed Reasoning - Factors to be considered for the purposes of the discretion in subsection 99A(2) of the ITAA 1936: In Case A50 [4] G.R. Thompson (member) proposed a number of factors that should be considered for the purposes of the discretion of subsection 99A(2) of the ITAA 1936: [at 302] 1 . Protection of the revenue - This first proposition needs no lengthy exposition. It accords with my understanding of a clear policy of the Income Tax Assessment Act , and indeed of all taxing statutes. In the Income Tax Assessment Act , it finds its highest point in sec. 260. 2. The interests of taxpayers generally - This principle is, I think, complementary to the first principle, for it is trite to say that each successful tax avoiding scheme results in a proportionate increase in the tax burden to be borne by all other taxpayers. In taking into account this principle, it would, I think, be relevant to consider whether the type of arrangement under consideration in any particular case is wide-spread or increasing in its incidence. The discretion could then be exercised to discourage practices which are causing the tax burden to fall unevenly on taxpayers within a particular class. 3. Protection of legitimate and reasonable family and business arrangements - The right of an individual to deal with his own property and to arrange the affairs of his family and his business in any way that he sees fit, subject only to the restrictions imposed by statute or common law, is, I think, well entrenched in the sociological, political and legal structure of the Australian community. It seems to me that it would be inappropriate to use a discretion under a taxing statute to discourage the exercise of that right except in cases where such an exercise is to the detriment of the community at large. 4. Arrangements for the good of the public generally - One can readily envisage arrangements which fall for consideration under sec. 99A being of such a kind that, if such arrangements were discouraged, the springs of charity might tend to dry up. An example of such an arrangement would be a voluntary trust established inter vivos for the maintenance or education either of an infant or of a person of full age who is, say, mentally defective to the extent that he is under legal disability. The purpose and effect of such a trust could be to prevent the beneficiary from becoming a charge on the State. I would regard it as inappropriate, in the absence of any countervailing consideration, to use the discretion under sec. 99A to discourage such a charitable exercise. 5. Trusts arising out of the exercise of a public duty - Under this head I would include the administration of trusts such as those imposed upon trustees in bankruptcy by the Bankruptcy Act or those imposed upon officers of the court by order of the various courts. Under the broad terms of sec. 99A these fall for consideration and it seems to me that, to the extent to which the discretion under sec. 99A would be exercised to the detriment of such trusts, the purposes of the statute or the order under which the trusts come into being would be frustrated. In considering these matters in Case A50 Thompson stated that [at 302 and 303]: 15. On the foregoing broad bases, it seems to me to be possible to distinguish in particular cases those in which it would be proper to invoke the deterrent effect that can arise by the exercise of the discretion one way or the other... The process of forming the opinion that one is obliged to form will involve the difficult, but perhaps not impossible, task of weighing the merits of each case to decide whether they fall on the side of those practices that ought to be discouraged because of the preponderance of undesirable elements or on the side of those which ought not to be discouraged because they produce a desirable social result. 16. ... A wide survey and close scrutiny of all the surrounding circumstances, including, but not by any means limited to, an examination of the terms of any relevant instrument, the manner in which those terms have been or are capable of being implemented, the circumstances under which the trust is called into being, the overall effect achieved or sought to be achieved upon the tax affairs of all parties directly or indirectly affected by the trust and the manner in which the arrangement is administered, would be called for. This enquiry should, I think, furnish the mind in such a way that the scale will fall either on the side of practices which ought to be discouraged or on the side of those which ought not to be the subject of any deterrent. [Emphasis added] The factors proposed by Thompson in Case A50 seem to be derived from the judgement of Barwick CJ in Giris (at 4017) when he commented that: ... [the Commissioner] is able to make the choice in exercise of what, for want of a more precise expression I shall call a legislative discretion: he can apply one section rather than the other if he thinks it unreasonable to apply the latter of them. I have been unable to find any content for the word ''unreasonable'' in the context of the two sections except considerations of a kind upon which a legislature acts in deciding whether an enactment or its particular terms are or are not unreasonable having regard to the interests of the public generally, of the citizen to be affected, of the Revenue and of the requirements of those policies, political, economic and fiscal which the Parliament is prepared to sanction... [Emphasis added] In Case A50 Davies (in commenting on Windeyer J's comments at 4017 in Giris) stated that: What their Honours had in mind, I think, was this. Trusts are a proper means of achieving legitimate social, family and business objectives, objectives of a non-fiscal nature. They are also a means of achieving fiscal objectives, a means of avoiding or lessening the burden of tax. ... In cases where trusts are used as instruments to achieve both fiscal and non-fiscal ends - and competent draftsmen properly keep taxation laws in mind when preparing documents which affect a client's property and income - a decision must be reached, on the facts of each particular case as to which should prevail on the balance, the interests of the Revenue or the legitimate interests of the beneficiaries under the trust. [At 297] In Case B66 [5] , J. D. Davies (Member) Section 99A of the Act is not, in my opinion, a section designed to bring down specific practices - multiple trusts, the conversion of income receipts into capital repayments and the like - but, on the contrary, is a section which prescribes a general rule applicable unless the Commissioner, or a Board on a review, is of the opinion that, in the particular case, it is unreasonable for it to be so. The cases where, in my view, it is unreasonable for the section to apply are those where the application of the section inhibits the achievement of what are primarily non-fiscal, social, family or business ends. This is not such a case. [Emphasis added] It is considered that the matters enunciated by Thompson in Case A50 satisfy the requirements of Giris and provide an appropriate frame work containing the relevant matters to be considered by the commissioner in relation to the discretion in subsection 99A(2) of the ITAA 1936. In Giris , the High court commented that: • ' ... the discretion is wide and though being really legislative in nature, what is relevant to its formation may range over an extremely wide spectrum of fact and consideration ...' [per Barwick J., at 374] • 'Here the Commissioner's discretion is apparently at large... I assume that [the Commissioner] is to be guided and controlled by the policy and purpose of the enactment, so far as that is manifest in it. ... ' [Per Windeyer J., at 384] | Detailed Reasoning - Application of legislation: In forming an opinion for Section 99A(2) the Trust was created under the terms of the Will of XXXX (date of death DD MM 20XX) and is considered to be a " Trust estate.... That resulted from a will " for the purposes of subparagraph 99A(2)(a)(i) of the ITAA 1936. The Trustee has retained net income in respect of the 20XX, 20XX and 20XX financial years. The income will be assessed to the Trustee under Section 99A of the ITAA 1936 unless in respect of each year, '...Commissioner is of the opinion that it would be unreasonable that this section should apply in relation to that trust estate in relation to that year of income' (Subsection 99A(2)). In forming he opinion for the purposes of subsection 99A(2) of the ITAA 1936, the Commissioner is required to have regards to the matters in subsection 99A(3) and Subsection 99A(3)(a) of the ITAA 1936. | Detailed Reasoning - Consideration of paragraphs 99A(3)(a) and (b) of the ITAA 1936: You have advised that in respect of the income years ending 30 June 20XX, 20XX, and 20XX: • The assets held by the Trustee consisted of: - XX investment (managed investment platform) - XX investments - XX investments(s) - XX investments - XX investment(s) - XX investments(s) • The Assets held by the Trustee did not consist of: - Shares in private companies or units in any private trusts - Other property acquired at non-arm's length value; and - Loans provided to related parties • You have also advised that in respect of the income years ending 30 June 20XX to 20XX you agree to the inclusion of the Assumptions, stated above, that include: Throughout the ruling period: a) The Trust deed will not be amended b) The Property of the Trust will consist only of: i. Property vested in the Trustee (that was vested in the executor of the Will and listed in the Inventory of property annexed to the Grant of Probate document) under the terms of the Will of the deceased individual; ii. Property that represents accumulations of income or capital from property that satisfies the requirement in (i); iii. Property from the sale of these assets of the Trust; and iv. Property from the re-investment of property that satisfies the requirement in (iii). c) The assets of the Trust will consist only of: i. Public company shares or other direct, or indirect, interests in widely-held entities; ii. Australian real property; and iii. Cash d) The Distributions of income to the beneficiaries of the Trust will be paid out, or applied, to the relevant beneficiary within 2 years of the end of the relevant income year. e) The Trustee will administer the Trust in a conventional manner and not as a tax avoidance device. f) The Trustee will not enter into arrangements beyond the purpose for which section 99 of the ITAA 1936 was retained or of a type that the Commissioner will seek to discourage. | Detailed Reasoning - Consideration of paragraph 99A(3)(c) of the ITAA 1936: In the current circumstances the 'other matters' that are considered to be relevant for the purposes of forming an opinion for the purposes of subsection 99A(2) are encapsulated by the matters enunciated by Member Thompson in Case A50 (69 ATC 288). Broadly, these matters involve the Commissioner having regards to the objects of the section in protecting, on the one hand, the revenue against tax avoiding devices and the interests of taxpayers generally in the equal distribution of the tax burden and, on the other hand, the right of the subject to make legitimate and reasonable family and business arrangements. Each of these matters will be considered in turn: (i) The revenue should be protected against tax avoiding devices Based on the information provided the Trust has not been, and will not be, used in a way that would be considered as tax avoiding device. (ii) The interests of taxpayers generally should be protected The Trustees have not used, and will not use, the Trust to avoid tax or cause the tax burden to fall unevenly on other taxpayers to increasing the tax burden borne by these other taxpayers. (iii) Protection of legitimate and reasonable family business The right of an individual to arrange business and family matter as they see fit is discussed in Case A50 , as per the Trust in conjunction with the information supplied shows, the Trust was created from the will of a deceased estate and has not been utilised in an unconventional way. (iv) Arrangement for the good of the public generally This Trust is not a Trust that is applicable to this factor. (v) Trusts arising out of the exercise of a public duty This Trust is not a trust that is applicable to this factor | Detailed Reasoning - Surrounding circumstances to also be considered: In Case A50 Thompson suggested that [at 302 and 303], in the process of forming an opinion for the purposes of subsection 99A(2) of the ITAA 1936 the commissioner should undertake, '[a] wide survey and close scrutiny of all the surrounding circumstances, including but not by any means limited to' [emphasis added]: • An examination of the terms of any relevant instrument. • The manner in which those terms have been or are capable of being implemented. • The circumstances under which the trust is called into being. • The overall effect achieved or sought to be achieved up the tax affairs or all parties directly. • The manner in which the arrangement is administered. In relation to the 'surrounding circumstances' as listed above it is noted that: • The Trust is a testamentary trust that resulted from the Will of XXXX. • The Trust has been established under the terms of the Will and has been operated in a conventional manner and is not considered to be operating as a 'tax avoidance device'. | Detailed Reasoning - Conclusion as to whether it is unreasonable for section 99A of the ITAA 1936 to apply to the Trust in respect of the Ruling Period: The matters that are considered relevant to forming an opinion for the purposes of subsection 99A(2) are: • The Trust resulted from a Will and satisfies the requirement of paragraph 99A(2)(a). • In the income years 20XX, 20XX and 20XX: - The Trustee has been assessable and liable to pay tax on the net income of the Trust. - Tax has not been avoided by the exercise of powers available to the Trustee's under the Trust Deed. - The Trust has been administered in a conventional manner by the Trustee's and not as a tax avoidance device. - The Trustee has not entered into any arrangements beyond the purpose for which section 99A was retained in the ITAA 1936 of a type that the Commissioner would seek to discourage. • The Trustee have agreed to the following assumptions in relation for the income years ended 30 June 20XX to 20XX: - The Trust deed shall not be amended - The property of the Trust will consist only of: (i) Property vested in the Trustee (that was vested in the executor of the Will and listed in the Inventory of property annexed to the Grant of Probate document) under the terms of the Will of the deceased individual; (ii) Property that represents accumulations of income or capital from property that satisfies the requirement in (i); (iii) Property from the sale of these assets of the Trust; and (iv) Property from the re-investment of property that satisfies the requirement in (iii). - The assets of the Trust will only consist of: (i) Public company shares or other direct, or indirect, interests in widely-held entities; (ii) Australian real property; and (iii) Cash - The Distributions of income to the beneficiaries of the Trust will be paid out, or applied, to the relevant beneficiary within 2 years of the end of the relevant income year. - The Trustee will administer the Trust in a conventional manner and not as a tax avoidance device. - The Trustee will not enter into arrangements beyond the purpose for which section 99 of the ITAA 1936 was retained or of a type that the Commissioner will seek to discourage. Having regards to the above matters, and the legislated purpose of section 99A to prevent the use of trusts for tax avoidance, the Commissioner is of the opinion that it is unreasonable for section 99A to apply to the Trust in respect of the income years in the Ruling Period. [1] Act No. 110 of 1964 [2] (1969) 119 CLR 365 [3] 72 ATC 4169; (1972) 128 CLR 595 [4] 69 ATC 288 [5] 70 ATC 319

Does IVA apply to this private ruling?: Part IVA of the Income Tax Assessment Act 1936 contains anti-avoidance rules that can apply in certain circumstances where you or another taxpayer obtains a tax benefit, imputation benefit or diverted profits tax benefit in connection with an arrangement. | If Part IVA applies, the tax benefit or imputation benefit can be cancelled (for example, by disallowing a deduction that was otherwise allowable) or you or another taxpayer could be liable to the diverted profits tax. | We have not fully considered the application of Part IVA to the arrangement you asked us to rule on, or to an associated or wider arrangement of which that arrangement is part. | If you want us to rule on whether Part IVA applies, we will first need to obtain and consider all the facts about the arrangement which are relevant to determining whether Part IVA may apply. | For more information on Part IVA, go to our website ato.gov.au and enter 'part iva general' in the search box on the top right of the page, then select 'Part IVA: the general anti-avoidance rule for income tax'.