| Disclaimer This edited version has been archived due to the length of time since original publication.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 private advice
Authorisation Number: 1051526600389
Date of advice: 10 June 2019
Ruling
Subject: Capital Gains Tax
Question
Will the transfer of the property held on Trust under the deed of agreement to the beneficiary upon the vesting of the trust result in a capital gains tax (CGT) event?
Answer
No.
A beneficiary that is absolutely entitled to a CGT asset as against the trustee will be the relevant taxpayer if a CGT event happens to the asset. This is the effect of section 106-50 of the ITAA 1997 which provides that an act done by a trustee in relation to an asset is taken to have been done by a beneficiary that is absolutely entitled to the asset. As the beneficiary is absolutely entitled against the trustee to the assets of the trust, no CGT event will occur when the trust vests and subsequently transfers the property to the beneficiary.
This ruling applies for the following periods:
Financial year ending 30 June 20XX
Financial year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The trust acquired a property after September 1985 which it held for the benefit of a beneficiary.
The trust will vest in the 20XX financial year and the property will be transferred to the beneficiary.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10
Income Tax Assessment Act 1997 section 104-55
Income Tax Assessment Act 1997 section 104-60
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).
