ato logo
Search Suggestion:

55 Choice for resident trustee to be assessed to capital gains on behalf of beneficiaries

Last updated 12 February 2019

Commencing for the 2010–11 income year, the trustee of a resident trust may choose (if permitted by the trust deed), to be assessed on a capital gain of the trust. This is allowed provided no beneficiary has received any amount referable to the gain during the income year or within two months of the end of the income year. The choice must be made in respect of the whole capital gain.

This is similar to (and replaces) the choice available to the trustee of a testamentary trust under the law prior to the 2010–11 amendments, but is not limited to those trustees. For example, the trustee will be able to make the choice if under the terms of the trust the income beneficiary cannot benefit from the capital gains. It is only the trustee that can make this choice.

If the trustee makes a choice in respect of a capital gain then:

  • the trustee will be assessed on the capital gain under section 99 or 99A, as appropriate
  • the capital gain is not taken into account in working out any beneficiary's net capital gain for an income year.

You should include the amount of the capital gain for which the trustee is making this choice at Y. Where the trustee is making the choice in respect of more than one capital gain, you should show the total of all capital gains at Y.

Capital gains under which this choice has been made should only be shown at Y and should not be shown at F Capital gains in item 54 for the relevant beneficiary.

You will need to insert an assessment calculation code from appendix 13 at X as appropriate for your trust. The relevant codes are:

For inter vivos trusts:

36 – Where the trustee is assessed under section 99A ITAA 1936
37 – Where the trustee is assessed under section 99 ITAA 1936.

For deceased estates:

15 – Where the trustee is assessed under section 99 ITAA 1936
16 – Where the trustee is assessed under section 99 ITAA 1936 without the tax-free threshold.