Income Tax Assessment Act 1997
CGT event E2 happens if you transfer a *CGT asset to an existing trust.
A change in the trustee of a trust does not constitute a change in the entity that is the trustee of the trust (see subsection 960-100(2) ). This means that CGT event E2 will not happen merely because of a change in the trustee.
The time of the event is when the asset is transferred. 104-60(3)
You make a capital gain if the *capital proceeds from the transfer are more than the asset ' s *cost base. You make a capital loss if those capital proceeds are less than the asset ' s *reduced cost base. 104-60(4)
If you are the trustee of the trust and no beneficiary is absolutely entitled to the asset as against you (disregarding any legal disability), the first element of the asset ' s *cost base and *reduced cost base in your hands is its *market value when the asset is transferred. Exceptions 104-60(5)
CGT event E2 does not happen if you are the sole beneficiary of the trust and:
(a) you are absolutely entitled to the asset as against the trustee (disregarding any legal disability); and
(b) the trust is not a unit trust.
A *capital gain or *capital loss you make is disregarded if you *acquired the asset before 20 September 1985.
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