Income Tax Assessment Act 1997
CHAPTER 3
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SPECIALIST LIABILITY RULES
PART 3-1
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CAPITAL GAINS AND LOSSES: GENERAL TOPICS
CGT event E6 happens if the trustee of a trust (except a unit trust or a trust to which Division 128 applies) *disposes of a *CGT asset of the trust to a beneficiary in satisfaction of the beneficiary's right, or part of it, to receive *ordinary income or *statutory income from the trust.
The time of the event is when the disposal occurs. Trustee makes a capital gain or loss 104-80(3)
The trustee makes a capital gain if the *market value of the asset (at the time of the disposal) is more than its *cost base. It makes a capital loss if that market value is less than the asset's *reduced cost base. Exception for trustee 104-80(4)
A *capital gain or *capital loss the trustee makes is disregarded if it *acquired the asset before 20 September 1985. Beneficiary makes a capital gain or loss 104-80(5)
The beneficiary makes a capital gain if the *market value of the asset (at the time of the disposal) is more than the *cost base of the right, or the part of it. The beneficiary makes a capital loss if that market value is less than the *reduced cost base of the right or part.
A *capital gain or *capital loss the beneficiary makes is disregarded if it *acquired the *CGT asset that is the right before 20 September 1985.
Division 104
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CGT events
Subdivision 104-E
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Trusts
SECTION 104-80
Disposal to beneficiary to end income right: CGT event E6
104-80(1)
CGT event E6 happens if the trustee of a trust (except a unit trust or a trust to which Division 128 applies) *disposes of a *CGT asset of the trust to a beneficiary in satisfaction of the beneficiary's right, or part of it, to receive *ordinary income or *statutory income from the trust.
Note:
Division 128 deals with the effect of death.
104-80(2)The time of the event is when the disposal occurs. Trustee makes a capital gain or loss 104-80(3)
The trustee makes a capital gain if the *market value of the asset (at the time of the disposal) is more than its *cost base. It makes a capital loss if that market value is less than the asset's *reduced cost base. Exception for trustee 104-80(4)
A *capital gain or *capital loss the trustee makes is disregarded if it *acquired the asset before 20 September 1985. Beneficiary makes a capital gain or loss 104-80(5)
The beneficiary makes a capital gain if the *market value of the asset (at the time of the disposal) is more than the *cost base of the right, or the part of it. The beneficiary makes a capital loss if that market value is less than the *reduced cost base of the right or part.
Note:
If the beneficiary did not pay anything for the right, the market value substitution rule does not apply: see section 112-20 .
Exception for beneficiary 104-80(6)A *capital gain or *capital loss the beneficiary makes is disregarded if it *acquired the *CGT asset that is the right before 20 September 1985.
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