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
Division 104
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CGT events
Subdivision 104-E
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Trusts
SECTION 104-60
Transferring a CGT asset to a trust: CGT event E2
104-60(1)
CGT event E2 happens if you transfer a * CGT asset to an existing trust.
104-60(2)
The time of the event is when the asset is transferred.
104-60(3)
You make a capital gain if the * capital proceeds from the transfer are more than the asset ' s * cost base. You make a capital loss if those capital proceeds are less than the asset ' s * reduced cost base.
104-60(4)
If you are the trustee of the trust and no beneficiary is absolutely entitled to the asset as against you (disregarding any legal disability), the first element of the asset ' s * cost base and * reduced cost base in your hands is its * market value when the asset is transferred.
Exceptions
104-60(5)
CGT event E2 does not happen if you are the sole beneficiary of the trust and:
(a) you are absolutely entitled to the asset as against the trustee (disregarding any legal disability); and
(b) the trust is not a unit trust.
104-60(6)
A * capital gain or * capital loss you make is disregarded if you * acquired the asset before 20 September 1985.
View history note
Hide history noteCGT event E2 happens if you transfer a * CGT asset to an existing trust.
Note:
A change in the trustee of a trust does not constitute a change in the entity that is the trustee of the trust (see subsection 960-100(2) ). This means that CGT event E2 will not happen merely because of a change in the trustee.
104-60(2)
The time of the event is when the asset is transferred.
104-60(3)
You make a capital gain if the * capital proceeds from the transfer are more than the asset ' s * cost base. You make a capital loss if those capital proceeds are less than the asset ' s * reduced cost base.
104-60(4)
If you are the trustee of the trust and no beneficiary is absolutely entitled to the asset as against you (disregarding any legal disability), the first element of the asset ' s * cost base and * reduced cost base in your hands is its * market value when the asset is transferred.
Exceptions
104-60(5)
CGT event E2 does not happen if you are the sole beneficiary of the trust and:
(a) you are absolutely entitled to the asset as against the trustee (disregarding any legal disability); and
(b) the trust is not a unit trust.
104-60(6)
A * capital gain or * capital loss you make is disregarded if you * acquired the asset before 20 September 1985.
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