ATO Interpretative Decision
ATO ID 2003/1148 (Withdrawn)
Income Tax
Restructure/resettlement of superannuation fund (from statute to deed based) - application of CGT Event A1FOI status: may be released
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This ATO ID has been withdrawn from the database as it is a simple restatement of the law and does not contain an interpretative decision.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Do the changes to the operation of the taxpayer superannuation fund result in the creation of a new eligible entity, for the purposes of Part IX of the Income Tax Assessment Act 1936 (ITAA 1936), such that any taxable gain is crystallised under CGT Event A1 (section 104-10) of the Income tax Assessment Act 1997 (ITAA 1997)?
Decision
No. The execution of the specified changes to the operation of the taxpayer superannuation fund, by the taxpayer, does not result in a taxable gain being crystallised under CGT Event A1 (section 104-10) of the ITAA 1997.
Facts
The taxpayer superannuation fund ('the fund') is a superannuation scheme established by Act of Parliament ('the fund Act'), with a board as trustee. The rules of the scheme are also contained in the fund Act. The fund is a complying fund for the purposes of the ITAA 1936.
Legislation was enacted to enable the fund to be regulated under the Superannuation Industry (Supervision) Act 1993, and a proprietary company was established to act as trustee (the new trustee). The new trustee has adopted a trust deed replicating, as far as possible, the benefit provisions contained in the fund Act, as well as other provisions. The fund Act has been repealed and the investments and liabilities of the fund transferred to the new trustee.
Notwithstanding the changes made, the taxpayer eligible entity has continued intact, and no new eligible entity has been created. The assets of the fund have been held by the trustees, on substantially the same terms, on behalf of the same eligible entity and its members, at all relevant times.
Reasons for Decision
Section 104-10 of the ITAA 1997 provides:
(1) [Application]
CGT event A1 happens if you *dispose of a *CGT asset.
(2) [Change of ownership requirement]
You dispose of a *CGT asset if a change of ownership occurs from you to another entity, whether because of some act or event or by operation of law. However, a change of ownership does not occur:
(a) if you stop being the legal owner of the asset but continue to be its beneficial owner; or
(b) merely because of a change of trustee.
* denotes a term defined in subsection 995-1(1) of the ITAA 1997
Paragraph 104-10(2)(b) of the ITAA 1997 makes it clear that Event A1 does not occur by reason of the change of trustee. Notwithstanding the changes made to the operation of the fund, no new fund or eligible entity has been created for the purposes of Part IX of the ITAA 1936. The fund property has at all times, therefore, been held on behalf of the same eligible entity. Accordingly, CGT event A1 does not occur as a result of the changes in question.
Date of decision: 20 October 2003Year of income: Year ended 30 June 2003
Legislative References:
Income Tax Assessment Act 1936
Part IX
section 104-10 Superannuation Industry (Supervision) Act 1993
Table of Contents
Case References:
Commissioner of Taxation v. Commercial Nominees of Australia Ltd
[2001] HCA 33
2001 ATC 4336
47 ATR 220
ATO ID 2003/1147
ATO ID 2003/1149
ATO ID 2003/1150
ATO ID 2003/1151
ATO ID 2003/1152
Keywords
Capital gains tax
Capital gains tax and superannuation funds - calculation of total capital gain
CGT event A1-disposal of a CGT asset
CGT events
Complying superannuation funds
Part IX taxation of superannuation entities
Public sector superannuation funds
Superannuation
Superannuation fund income
Trust resettlements
ISSN: 1445-2782
| Date: | Version: | |
| 20 October 2003 | Original statement | |
| You are here | 13 August 2010 | Archived |
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