Income Tax Assessment Act 1997
This section applies if:
(a) a *CGT event happens to an interest of a beneficiary of the lost policy holders trust in that trust; and
(b) the *capital proceeds from the event include or consist of money received by the beneficiary. 316-165(2)
Work out whether the beneficiary makes a *capital gain or *capital loss from the *CGT event, and the amount of the gain or loss, assuming that:
(a) the *capital proceeds from the CGT event were the amount they would be if they did not include any *market value of property other than money; and
(b) the *cost base and *reduced cost base for the interest were the amount worked out using the formula:
|* Capital proceeds from the * CGT event||×||Valuation factor worked out
under section 316-65
Assume that the beneficiary of the lost policy holders trust is paid $50 in money by the trustee to satisfy the beneficiary ' s interest in the trust so that a CGT event happens, and that the valuation factor worked out under section 316-65 is 0.9. The beneficiary makes a capital gain from the event of $5, worked out as follows:
$ 50 - ( $ 50 × 0.9)
Division 114 (Indexation of cost base) is not relevant, because this section provides exhaustively for working out the amount of the cost base.316-165(3)
The *capital gain or *capital loss is not to be disregarded, despite sections 316-55 and 316-160 .
The capital gain is not a discount capital gain: see section 115-55 .