| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your private ruling
Authorisation Number: 1012561758418
Ruling
Subject: Express trust: Capital Gains Tax
Question
Are you assessable for the entire capital gain made on the disposal of the property?
Answer
No.
This ruling applies for the following periods:
1 July 2013 to 30 June 2014
The scheme commences on:
20 May 2002
Relevant facts and circumstances
You were the owner of the property which was being held in an Express trust with yourself and your siblings as beneficiaries
The property was sold and settled recently.
The Express trust deed sets out proportions for the distribution of the proceeds of the sale of the property.
Relevant legislative provisions
Income Tax Assessment Act 1936 section 95
Income Tax Assessment Act 1936 section 96
Income Tax Assessment Act 1936 section 97
Income Tax Assessment Act 1997 section 104-10
Reasons for decision
Summary
The proceeds of sale and any capital gains for the sale of the property held in trust are to be distributed in accordance with the proportions allocated in the trust deed.
Detailed reasoning
The trust deed that has been supplied by you in correspondence is an Express trust.
An express trust is one intentionally created by the owner of property in order to confer a benefit upon another. It is created by express declaration, which can be effected by some agreement or common intention held by the parties to the trust.
For an express trust to be created it is necessary that there is certainty of the intention to create a trust, certainty of the subject matter of the trust and certainty as to the object of the trust.
While trusts can be created orally, all State Property Law Acts contain provisions derived from the Statute of Frauds that preclude the creation or transfer of interests in land except if evidenced in writing. Therefore Express trusts must be evidenced in writing.
In your circumstances a trust deed was established between you and your siblings. Therefore, there is written evidence that you were holding the property as trustee on behalf of the beneficiaries, yourself and your siblings up until the time that the property was sold.
As you held the legal title in the property in accordance with the trust deed you are only assessable on your share of the net capital gain made on the disposal of the property.
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
