Private ruling: Commissioner’s consideration of whether section 99A rates should apply
Date of advice: 12 September 2018
Published: October 2018
Ruling period: Financial 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 apply progressive individual rates of tax as per 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 that trust estate in relation to the relevant year of income. Accordingly section 99 of the ITAA 1936 will apply.

Relevant facts and circumstances: The deceased purchased a property. The deceased passed away. A testamentary trust was created. Under the trust the deceased’s child is entitled to receive the income from the property and upon their death, the property would form part of the deceased’s residuary estate. In the 20xx-XX financial year, the deceased’s child provided notice requiring the trustee to sell the property. The trustee entered into a contract to sell the property. It is expected that the trustee will have a capital gain. The trustee has no other capital gain. The income beneficiary received 100% of the income derived from the property. The trustee has elected to include the net capital gain in their assessable income. The property is the sole remaining asset of the testamentary trust. No further assets have been transferred into the testamentary trust.

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