Edited version of private ruling

Authorisation Number: 1011455641741

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Ruling

Subject: Corpus distribution

Question 1

Is the distribution of the corpus distribution from the family trust or any part of it assessable income in the hands of the beneficiaries under section 97 of the Income Tax Assessment Act 1936 (ITAA 1936)?

Answer

No.

Question 2

Is the distribution of the corpus distribution from the family trust or any part of it, included in the assessable income of the beneficiaries under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer

No.

Question 3

Is the distribution of the corpus distribution from the family trust or any part of it, included in the assessable income of the beneficiaries under section 99B of the ITAA 1936?

Answer

No.

Question 4

Did the distribution of the Corpus distribution from the Family trust cause CGT event E4 to happen to the beneficiaries under section 104-70 of the ITAA 1997?

Answer

No.

Question 5

Did the distribution of the corpus distribution from the family trust give rise to a capital gain being made by the beneficiaries under section 104-75 of the ITAA 1997?

Answer

Yes, however any capital gain or loss is disregarded.

Question 6

Did the distribution of the corpus distribution from the family trust cause CGT event E6 to happen to the beneficiaries under section 104-80 of the ITAA 1997?

Answer

No.

Question 7

Did the distribution of the corpus distribution from the family trust cause CGT event E7 to happen to the beneficiaries under section 104-85 of the ITAA 1997?

Answer

No.

Question 8

Did the distribution of the corpus distribution from the family trust cause CGT event E8 to happen to the beneficiaries under section 104-90 of the ITAA 1997?

Answer

No.

Question 9

Is the payment upon presentation of the bill of exchange, or any part of it, assessable income of the beneficiaries under section 6-5 of the ITAA 1997?

Answer

No.

Question 10

Did the payment upon presentation of the bill of exchange, or any part of it, give rise to a capital gain being made by the beneficiaries under section 104-25 of the ITAA 1997?

Answer

No.

Question 11

Did the presentation of the bill of exchange by the beneficiaries for payment cause CGT event A1 to happen to the beneficiaries under section 104-10 of the ITAA 1997?

Answer

No.

This ruling applies for the following period:

Year ending 30 June 2009

The scheme commences on:

1 July 2008

Relevant facts and circumstances

As part of a dispute a payment of a settlement amount was made to affected parties. This payment included a corpus distribution out of the family trust to the beneficiaries who comprised at that time between them the directors, secretary and members of the trustee company.

The family trust is a discretionary trust.

A trustee resolution determined that the directors have determined to revalue the property in the accounts of the family trust and credit this increase in recorded value to the corpus account.

A further resolution was made by the trustee for the family trust to make an interim distribution of an amount of corpus of the family trust to certain beneficiaries.

The corpus distribution was distributed to beneficiaries through the negotiation of the bill of exchange.

At the time of the distribution of corpus, the trustee had not exercised its discretion under the terms of the deed of settlement as to distribution of the net income of the family trust.

The beneficiaries are not under any legal disability.

The property interests held by the family trust were revalued on the basis of valuations from professional independent valuers.

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 95(1).

Income Tax Assessment Act 1936 Subsection 97(1).

Income Tax Assessment Act 1936 Section 99B.

Income Tax Assessment Act 1997 Section 6-5.

Income Tax Assessment Act 1997 Subsection 6-5(2).

Income Tax Assessment Act 1997 Section 6-10.

Income Tax Assessment Act 1997 Section 10-5.

Income Tax Assessment Act 1997 Section 104-70.

Income Tax Assessment Act 1997 Subsection 104-70(1).

Income Tax Assessment Act 1997 Section 104-75.

Income Tax Assessment Act 1997 Section 104-80.

Income Tax Assessment Act 1997 Section 104-85.

Income Tax Assessment Act 1997 Section 104-90.

Income Tax Assessment Act 1997 Section 102-25.

Income Tax Assessment Act 1997 Section 104-10.

Further issues for you to consider

We have limited our ruling to the questions raised in your application. There may be related issues that you should consider including:

Whether the circumstances may give rise to a new trust estate for the purposes of Australian income tax (that is trust resettlements). Please refer to the ATO document Creation of a new trust - Statement of Principles August 2001.This statement of principles has been prepared to guide taxpayers, advisers and ATO decision makers on when the Commissioner will treat changes as giving rise to a new trust estate.

You may apply for another ruling on this or any other matter.

Does Part IVA apply to this ruling?

Part IVA of the ITAA 1936 is a general anti-avoidance rule that can apply in certain circumstances if you or another taxpayer obtains a tax benefit in connection with an arrangement and it can be concluded that the arrangement, or any part of it, was entered into or carried out by any person for the dominant purpose of enabling a tax benefit to be obtained. If Part IVA applies the tax benefit can be cancelled, for example, by disallowing a deduction that was otherwise allowable.

We have not fully considered the application of Part IVA to the arrangement you asked us to rule on, or to an associated or wider arrangement of which that arrangement is part.

If you want us to rule on whether Part IVA applies we will first need to obtain and consider all the facts about the arrangement which are relevant to determining whether Part IVA may apply.

For more information on Part IVA, go to our website www.ato.gov.au and enter 'part iva general' in the search box on the top right of the page, then select: Part IVA: the general anti-avoidance rule for income tax.

Reasons for decision

Question 1 - Detailed reasoning

Net income in subsection 95(1) of the ITAA 1936 is broadly, the total assessable income of the trust estate calculated as if the trustee were a resident taxpayer less most allowable deductions.

Section 97 of the ITAA 1936 provides that where any beneficiary who is not under a legal disability is presently entitled to a share of the income of the trust estate, that share of the net income of the trust estate (i.e. the share of the amount calculated in the manner laid down in section 95 of the ITAA 1936) shall be included in the assessable income of the taxpayer.

The meaning of the expressions 'income of the trust estate' and 'share' were considered by the High Court in its decision in Commissioner of Taxation v. Phillip Bamford & Ors; Phillip Bamford & Anor v. Commissioner of Taxation [2010] HCA 10.3. Following the decision it is clear that 'income of the trust estate' takes its meaning from trust law such that, if the deed permits, capital receipts of a period can be treated as income for that period.

Application to your circumstances

In the present instance, the applicant has said that the distribution to the beneficiaries will be a distribution from the corpus rather than a distribution of the income of the trust estate.

Based on an analysis of the agreement it is confirmed that the distribution is capital in nature. Therefore, with the exception of the capital gains tax legislation, the distribution is not statutory income and therefore not assessable under section 6-10 of the ITAA 1997.

The corpus distribution is not included in the net income of the family trust as defined under section 95(1) of the ITAA 1936.

The corpus distribution is not assessable under section 97 of the ITAA 1936 for the beneficiaries.

Question 2 - Detailed reasoning

Section 6-5 of the ITAA 1997 provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year.

Ordinary income has generally been held to include three categories of income, namely, income from rendering personal services, income from property and income from carrying on a business.

Other characteristics of income that have evolved from case law include receipts that:

- are earned

- are expected

- are relied upon, and

- have an element of periodicity, recurrence or regularity.

Income from trusts is normally assessed under the provisions as listed under section 10-5 of the ITAA 1997 under trusts.

Where payments are made out of corpus to an annuitant or other beneficiary entitled to income either to make up a deficiency of income or in advance on account of income, such payments are assessable income in the hands of the recipients. The fact that an annuity is paid out of capital does not affect its character as income in the hands of the annuitant: Tindal v FC of T (1946) 8 ATD 152; 72 CLR 608; Brodie's Trustees v IR Commrs (1933) 17 TC 432; Lindus and Hortin v IR Commrs (1933) 17 TC 442; Cunard's Trustees v IR Commrs (1945) 173 LT 258.

Application to your circumstances

The revaluation of certain property of the family trust and the crediting of its corpus account by the aggregate of the increase in recorded values of those assets is neither income of the trust according to ordinary concepts, nor is such increase an amount derived by the family trust at the time of revaluation.

The payment was made in exercise of a power of appointment over capital and was merely a payment of capital that did not create an entitlement or right to income.

The corpus distribution is not assessable under section 6-5 of the ITAA 1997 as ordinary income for the beneficiaries.

Question 3 - Detailed reasoning

Subsection 99B(1) of the ITAA 1936 provides that where, during a year of income, a beneficiary who was a resident at any time during the year is paid a distribution from a trust, or has an amount of trust property applied for their benefit, that amount is to be included in the assessable income of the beneficiary.

Subsection 99B(2) of the ITAA 1936 modifies the rule in subsection 99B(1) of the ITAA 1936 and has the effect that the amount to be included in assessable income under subsection (1) is not to include any amount that represents either:-

- corpus of the trust, but an amount will not be taken to represent corpus to the extent that it is attributable to income derived by the trust which would have been subject to tax had it been derived by a resident taxpayer; or

- amounts that would not be included in assessable income of a resident taxpayer if they had been derived by that taxpayer; or

- amounts that have been or will be included in the assessable income of the beneficiary under section 97 of the ITAA 1936 or have been liable to tax in the hands of the trustee under sections 98, 99 or 99A of the ITAA 1936.

The Explanatory Memorandum (EM) of Income Tax Assessment Amendment Bill (No. 5) 1978 provides the following comments on the purpose of section 99B of the ITAA 1936 when it said that:

Proposed section 99B will require the inclusion in a beneficiary's assessable income of amounts paid to or applied during a year of income for the benefit of a resident beneficiary where that amount represents trust income of a class which is taxable in Australia but which has not previously been subject to Australian tax in the hands of either the beneficiary or the trustee. It will normally apply where accumulated foreign-source income of a non-resident trust estate (or of a resident trust estate that previously was not able to be taxed in Australia in the light of the Union Fidelity decision) is distributed to a resident beneficiary.

Subsection (1) of proposed section 99B, which is subject to the important qualifications expressed in subsection (2), sets out the basic general rule that where during a year of income a beneficiary who was a resident at any time during the year is paid a distribution from a trust estate or has an amount of trust property applied for his benefit, that amount is to be included in the assessable income of the beneficiary.

Proposed subsection (2) modifies this general rule and will have the effect that the amount to be included in assessable income under subsection (1) is not to include anything that represents either

- corpus of the trust estate, but an amount will not be taken to represent corpus to the extent that it is attributable to income derived by the trust estate which would have been subject to tax had it been derived by a resident taxpayer (paragraph (a)); or

- amounts - such as capital gains, or ex-Australian income taxed abroad and exempt from tax under section 23(q) of the Principal Act - that would not be included in assessable income if derived by a resident taxpayer (paragraph (b)); or

- amounts that have been or will be liable to tax in the hands of the beneficiary under section 97 of the Principal Act or in the hands of the trustee under sections 98, 99 or 99A of that Act, whether or not (e.g., because the income is below a minimum amount) the amount has actually borne tax in the hands of the beneficiary or trustee (paragraph (c)).

In Traknew Holding Pty Ltd v FCT 21 ATR 3466 (folio 64-66), Hill J expressed some difficulty in the section being applied an Australian resident trust.

The EM indicates that section 99B of the ITAA 1936 was introduced to deal with non-resident trusts with untaxed foreign sourced income that was subsequently distributed to Australian resident beneficiary.

Application to your circumstances

The family trust was a resident of Australia during the income year ended 30 June 2009.

As the distribution by the trustee to the beneficiaries is a distribution of corpus from a resident trust estate, section 99B of the ITAA 1936 would not be applicable in this instance.

Question 4 - Detailed reasoning

CGT Event E4 (section 104-70 of the ITAA 1997) occurs when a trustee makes a payment to a beneficiary in respect of their unit or their interest in the trust.

In Taxation Determination TD 2003/28, the Commissioner commented on the above situation as follows:

CGT event E4 does not happen if a trustee of a discretionary trust makes a non-assessable payment to a mere object in respect of their interest in the trust.

(b) No, CGT event E4 does not happen if a trustee of a discretionary trust makes a non-assessable payment to a default beneficiary in respect of their interest in the trust if the interest was not acquired for consideration or by way of assignment.

2. In this context, a mere object refers to a member of the class of beneficiaries of the trust who is an object of a power of appointment vested in the trustee (i.e. a discretionary beneficiary). A default beneficiary refers to a beneficiary whose entitlement to income or corpus arises should the trustee decide not to exercise their discretion in favour of the objects or fail to exercise their discretion.

CGT event E4 does not happen in the circumstances described in paragraph 1 because a mere object or default beneficiary is not considered to have an 'interest in the trust' of the nature or character required in paragraph 104-70(1)(a).

Application to your circumstances

In the present instance, the trustee of the family trust made a distribution to beneficiaries in the form of an in specie distribution (a bill of exchange).

The family trust is a discretionary trust and so in making the distribution the trustee is not making a payment in respect of a beneficiaries unit or interest in the trust for the purposes of paragraph 104-70(1) of the ITAA 1997.

Question 5 - Detailed reasoning

When a beneficiary becomes absolutely entitled to a CGT asset of the trust as against the trustee, CGT event E5 happens under section 104-75 of the ITAA 1997. The time of the event is when the beneficiary becomes absolutely entitled to the asset.

Either or both the trustee and the beneficiary of the trust may make a gain or loss.

In Taxation Ruling TR 2004/D25, the Commissioner commented on the above situation in regards to discretionary trusts:

8. The main CGT provisions to which the concept of absolute entitlement is relevant apply if a beneficiary is (or becomes) absolutely entitled to a CGT asset of the trust as against the trustee (disregarding any legal disability): see section 106-50 and CGT event E5 in section 104-75.

9. The provisions apply separately to each beneficiary and asset of the trust. They require absolute entitlement to the whole of a CGT asset of the trust. While a beneficiary's interest in the trust, or in the trust property, may also be a CGT asset as that term is defined in section 108-5, neither is the CGT asset to which the relevant provisions refer…

Core principle

10. The core principle underpinning the concept of absolute entitlement in the CGT provisions is the ability of a beneficiary, who has a vested and indefeasible interest in the entire trust asset, to call for the asset to be transferred to them or to be transferred at their direction. This derives from the rule in Saunders v. Vautier applied in the context of the CGT provisions (see Explanation paragraphs 41 to 50). The relevant test of absolute entitlement is not whether the trust is a bare trust (see Explanation paragraphs 33 to 40).

Beneficiary must have an interest in the trust assets

70. Clearly a trustee would only be obliged to satisfy a demand from a beneficiary with an interest in the trust asset. Therefore, the beneficiary must have an interest in the relevant asset in order to be considered absolutely entitled to it for CGT purposes.

Discretionary trusts

71. Because an object of a discretionary trust does not have an interest in the trust assets, they cannot be considered absolutely entitled to any of the trust assets prior to the exercise of the trustee's discretion in their favour…

Multiple beneficiaries: assets must be fungible

90. Where more than one beneficiary has an interest in the trust assets, absolute entitlement can only be established if the assets are fungible.

91. If the assets are not fungible, but more than one beneficiary has an interest in them, then that is the clearest possible indication that, under the terms of the trust, individual beneficiaries are not entitled to particular assets to the exclusion of others. That is, if each asset is unique, but the trust does not clearly set out which beneficiary is to get which asset, this indicates an intention that each beneficiary is in fact to have an interest in each of the assets.

92. In those circumstances, absolute entitlement cannot be established, unless all parties (that is, the trustee and the beneficiaries) agree that a particular asset or assets be set aside for each beneficiary to the exclusion of the others. If that happens, the beneficiaries may be regarded as having become absolutely entitled (but only from that time) to the asset or assets that it is agreed should be set aside for them such that CGT event E5 happens. But of course the basis of that absolute entitlement is the straight forward notion of a sole beneficiary in respect of each asset.

When are assets fungible?

93. Assets are fungible if each asset matches the same description such that one asset can be replaced with another. Assets are fungible if they are of the same type (for example, shares in the same company and with the same characteristics).

Many transactions can be broken down into several sub-transactions, each of which might independently attract the operation of the CGT provisions. In such situations, it is relevant for the Commissioner to consider what the real transaction is.

Application to your circumstances

The Corpus Distribution payment to the beneficiaries has been made by the presentation of a bill of exchange as a medium of exchange.

The bill of exchange was made out to the beneficiaries jointly.

CGT Event E5 will happen at the point that the beneficiaries become absolutely entitled to the bill of exchange. However, as the beneficiaries did not incur any expenditure to acquire the bill of exchange, then any capital gain or loss is disregarded (paragraph 104-75(6)(a) of the ITAA 1997).

Question 6 - Detailed reasoning

CGT Event E6 happens if the trustee of a trust disposes of a CGT asset of the trust to a beneficiary in satisfaction of the beneficiary's right or part of a right to receive ordinary or statutory income from the trust: section 104-80 of ITAA 1997. Either or both the trustee and the beneficiary of the trust may make a gain or loss.

Application to your circumstances

As beneficiaries of a discretionary trust the only right the beneficiaries have in relation to ordinary or statutory income of the family trust is the right to be considered by the trustee along with all other discretionary beneficiaries upon the exercise of its discretion in distributing income of the family trust.

Because the right is not one which is defined with any particularity in the terms of the discretionary trust deed and as a favourable exercise depends on the trustee so exercising its discretion, which had not occurred, the beneficiaries cannot be said to have had a right or part of a right to receive the ordinary or statutory income of the family trust. The beneficiaries, being mere objects of the family trust, did not have a right to receive income from the trust.

In addition, the bill of exchange was not given to the beneficiaries in satisfaction of any right to income.

CGT event E6 in section 104-80 of the ITAA 1997 does not happen because the asset were not disposed of to the beneficiaries in satisfaction of the beneficiary's right to receive income from the trust because they are still potential beneficiaries of the family trust.

Question 7 - Detailed reasoning

CGT Event E7 happens if the trustee of a trust disposes of a CGT asset of the trust to a beneficiary in satisfaction of the beneficiary's interest, or part interest, in the trust capital: section 104-85 of the ITAA 1997. Either or both the trustee and the beneficiary of the trust may make a gain or loss.

However, a capital gain or capital loss a beneficiary makes is disregarded if they acquired the trust interest (other than by way of an assignment from another entity) for no expenditure (subsection 104-85(6) of the ITAA 1997).

Application to your circumstances

The issue that needs to be determined in this case is whether the trustee has disposed of an interest to the beneficiaries or whether the interest was created in them.

Accordingly, it is considered that CGT event E7 in section 104-85 of the ITAA 1997 happened in this case, because the trustee disposed of a CGT asset (the bill of exchange) to the beneficiaries of the trust in satisfaction of part of the beneficiary's right to the trust capital. CGT event E7 happened at the time of disposal (subsection 104-85(2) of the ITAA 1997). As CGT event E7 has happened, there may be consequences for both the trustee and the beneficiaries.

The beneficiaries make a capital gain under CGT event E7 if the market value of the interest it acquires is more than the cost base of their interest in the trust. The remainder beneficiary makes a capital loss if the market value of the interest is less than the reduced cost base of their interest in the trust (subsection 104-85(5) of the ITAA 1997).

In this case, any capital gain or capital loss the beneficiaries make will be disregarded, because they did not acquire their trust interest by way of assignment, and did not incur any expenditure to acquire it (paragraph 104-85(6) of the ITAA 1997).

The first element of the cost base and reduced cost base of the remainder interest in the bill of exchange acquired by the beneficiaries will be based on its market value (at the time CGT event E7 happened): paragraph 112-20(1)(a) of the ITAA 1997.

Question 8 - Detailed reasoning

CGT event E8 occurs if a beneficiary who neither gave any money or property to acquire their interest in the trust capital nor acquired that interest by assignment, disposes of their interest (or part of it) to a person other than the trustee of the trust: subsection 104-90(1) of the ITAA 1997.

In Taxation Determination TD 2009/19, the Commissioner stated the following:

2. Having regard to the provisions of sections 104-90, 104-95 and 104-100, only those interests which constitute a vested and indefeasible interest in a share of the trust capital fall within the scope of CGT event E8. The interest of a taker in default of the trust capital is defeasible because the trustee may resolve to appoint the capital to another beneficiary.

Application to your circumstances

The only interest the beneficiaries have is the right to be considered by the trustee along with all other discretionary beneficiaries upon the exercise of its discretion in distributing the capital of the family trust. Therefore, they do not have a vested and indefeasible interest.

Therefore, CGT Event E8 did not happen.

Question 9 - Detailed reasoning

Section 6-5 of the ITAA 1997 provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year.

Ordinary income has generally been held to include three categories of income, namely, income from rendering personal services, income from property and income from carrying on a business.

Other characteristics of income that have evolved from case law include receipts that:

- are earned

- are expected

- are relied upon, and

- have an element of periodicity, recurrence or regularity.

In Taxation Ruling TR 92/3, the Commissioner commented on the above situation as follows:

15. If a taxpayer carrying on a business makes a profit from a transaction or operation, that profit is income if the transaction or operation:

(a) is in the ordinary course of the taxpayer's business (see paragraph 32 for an explanation of the circumstances in which a transaction is in the ordinary course of business) - provided that any gross receipt from the transaction or operation is not income; or

(b)   is in the course of the taxpayer's business, although not within the ordinary course of that business, and the taxpayer entered the transaction or operation with the intention or purpose of making a profit; or

(c)   is not in the course of the taxpayer's business, but

(i)   the intention or purpose of the taxpayer in entering into the transaction or operation was to make a profit or gain; and

(ii)   the transaction or operation was entered into, and the profit was made, in carrying out a business operation or commercial transaction.

16. If a taxpayer not carrying on a business makes a profit, that profit is income if:

(a)   the intention or purpose of the taxpayer in entering into the profit-making transaction or operation was to make a profit or gain; and

(b)  the transaction or operation was entered into, and the profit was made, in carrying out a business operation or commercial transaction.

Application to your circumstances

In the present instance, the presentation by the beneficiaries of the bill of exchange to another entity for payment is not within one of the categories of income producing activities referred to above from which income is generally considered to be derived.

The activities of the beneficiaries did not involve a business of negotiating bills of exchange or the deriving of profits from the acceptance of or trading in bills of exchange.

The amount received upon presentation of the bill of exchange was not earned, expected, relied upon nor did it have any element of periodicity, recurrence or regularity within the meaning of those expressions in the context of characterising a receipt as income.

The presentation of the bill of exchange by the beneficiaries is simply a realisation of an asset obtained and held by them on capital account.

The amount received is not income according to ordinary concepts.

Therefore, no part of the payment received upon presentation of the bill of exchange by the beneficiaries gives rise to assessable income in their hands under section 6-5 of ITAA 1997.

Question 10 - Detailed reasoning

CGT event C2 in section 104-25 of the ITAA 1997 happens if a taxpayer's ownership of an intangible CGT asset ends in certain ways, including because the asset expires or is redeemed, cancelled, released, discharged, satisfied, abandoned, surrendered or forfeited. The time of the event is when a taxpayer enters into the contract that results in the asset ending. If there is no contract, the time of the event is when the asset ends (subsection 104-25(2) of the ITAA 1997).

Application to your circumstances

When the bill of exchange was presented for payment, the asset has ended by the bill of exchange being redeemed. Therefore, CGT event C2 happened to the bill of exchange when the other entity honoured its obligation to pay the amount of the face value of the bill upon its presentation by the beneficiaries.

The cost base of the bill of exchange is at least equal to its market value at the time the beneficiaries acquired it by reason of the market value substitution rule in subsection 112-20(1) of ITAA 1997.

Neither of the circumstances specified in subparagraphs 112-20(1)(a)(i) or (ii) of the ITAA 1997 apply because CGT event E7 happened.

Similarly, subsection 112-20(2)(b) of the ITAA 1997 is not applicable because a CGT event did happen in relation to the beneficiaries acquisition of the asset.

Consequently, as the capital proceeds under subsection 116-20(1) of ITAA 1997 equalled the amount received with respect to the C2 ending and that amount was the same as the face value of the bill of exchange (i.e. its cost base), the beneficiaries did not make a capital gain upon the ending of the asset and no part of the payment upon presentation of the bill of exchange by the them gave rise to assessable income in their hands under this CGT event.

Question 11 - Detailed reasoning

CGT event A1 happens if a person disposes of a CGT asset:  subsection 104-10(1) of the ITAA 1997. A person disposes of a CGT asset if a change of ownership occurs from that person to another entity, whether because of some act or event or by operation of law:  s 104-10(2). 

Application to your circumstances

Presentation for payment of a bill of exchange is the formal production of it by the holder to the person from whom the holder is demanding payment in order to receive payment. Upon presentation and payment, the rights of the holder of the bill of exchange are satisfied and discharged; the ownership of the rights embodied by the bill of exchange are not changed. In the present instance, the presentation by the beneficiaries of the bill of exchange for payment does not cause a change in ownership of the bill of exchange.

Therefore, CGT event A1 does not apply to any of the beneficiaries upon their presenting the bill of exchange, and hence it is unnecessary to consider whether or not it is a more specific event (under section 102-25 of the ITAA 1997) than CGT event C2, which as discussed previously, does presently apply to the beneficiaries upon presentation of the bill of the exchange.

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