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Edited version of private advice

Authorisation Number: 1051800980400

Date of advice: 02 February 2021

Ruling

Subject: Wash sale arrangements

Question

Does a wash sale arrangement occur if you sell Asset X to your trust?

Answer

No.

Question

Does a wash sale arrangement occur if you sell Asset X to your trust?

Answer

No.

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You purchased Asset X in 20XX for $X. You advised that the current market value of this asset is $X.

You have been purchasing Asset X since 20XX which have totalled $X. You advised that the current market value of Asset X is $X.

You advised that you have set up a trust in Month X.

You and your family members are beneficiaries of this trust.

Your purposes of setting up the trust are for investing and growing the value of the assets.

You intend to sell your assets to the trust at market value.

Your reason for selling the assets to the trust is so that it could obtain a bank guarantee for a loan to purchase another asset.

You intend on using the proceeds from the sale of your assets to lend capital to the trust. You also intend on using a percentage of the proceeds for renovations on your main residence.

Your family members are retired foreign residents. They will be providing around a percentage of the trust's requisite funding to purchase the assets. The remainder will be funded by you via loan or your own capital through using equity in your main residence.

The trust has been set up with a trustee company. Your family members will have X% beneficiary ownership and you will have X% beneficiary ownership of the assets.

You are not expecting any capital gains from the sale of any assets after this event.

Relevant legislative provisions

Income Tax Assessment Act 1936 section 177A

Income Tax Assessment Act 1936 section 177CB

Income Tax Assessment Act 1936 section 177D

Income Tax Assessment Act 1997 section 104-60

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