Capital gains, trusts and the CGT concession
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If you are an individual who is a beneficiary in a trust, you have received, or are entitled to, a share of the net income of the trust, and the share includes some of the trust's net capital gain:
- you deduct the amount of the net capital gain included in your share of the trust income by excluding it as explained in question 11 of TaxPack 2000 supplement (step 2 on page s6); and
- in place of the amount you exclude, you are treated as having a capital gain or gains worked out, as explained below.
Question 11 asks you to exclude net capital gains from the amount of trust income shown at U item 11 on the supplementary section of the 2000 tax return for individuals. This amount should be shown on your trust distribution statement. However, if your statement shows that your share of the trust's net capital gain is more than the overall net amount of your share of the trust's net income, do not exclude the whole capital gain component when you complete U item 11. In that situation, you exclude instead only the overall net amount of your share of trust income. You also use only this lesser amount in working out your capital gains.
Your trust distribution shows that you have received a share of the net income of the trust of $2,000. This is made up of primary production loss of $5,000, non-primary production income of $2000 and a net capital gain of $5,000. You will show a $5,000 loss from primary production and a $5,000 non-primary production income at item 11. You exclude only $2,000 from item 11 as your share of the net income of the trust ($2,000) is less than your share of the net capital gain. The $2,000 is the amount you use in working out your net capital gain at item 14 on the tax return.
Last modified: 18 Sep 2009QC 18323