Step 2-Capital gain you are taken to have made

Warning:

This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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If you are a beneficiary who is entitled to a share of a trust net capital gain you are taken to have made the following extra capital gains.

You may be a beneficiary who is entitled to a share of the income of a trust that includes a capital gain reduced by the CGT discount or the small business 50 per cent active asset reduction. In this case, you need to gross up the capital gain by multiplying it by 2. This grossed-up amount is an extra capital gain.

You multiply by 4 your share of any part of the net capital gain from a trust that the trust has reduced by both the CGT discount and the small business 50 per cent active asset reduction. This grossed-up amount is an extra capital gain.

Note-Grossed-up gains: If you are entitled to any part of the net capital gain from a trust that the trust has not reduced by one of these concessions, then that amount is an extra capital gain.

Note-No double taxation: You are not taxed twice on these extra capital gains because you did not include your capital gains from the trust at item 12 on your tax return.

These extra capital gains are taken into account in working out your net capital gain for the income year. You include them at step 2 in part B or part C.

Note-Applying the concessions

Remember that you must use the same method as the trust to calculate your capital gain.

This means you cannot apply the CGT discount to capital gains distributed to you from the trust calculated using the indexation method or 'other' method.

Also, you can only apply the small business 50 per cent active asset reduction to grossed-up capital gains to which the trust applied that concession.