Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

Division 104 - CGT events  

Subdivision 104-E - Trusts  

SECTION 104-75   Beneficiary becoming entitled to a trust asset: CGT event E5  

104-75(1)  
CGT event E5 happens if a beneficiary becomes absolutely entitled to a *CGT asset of a trust (except a unit trust or a trust to which Division 128 applies) as against the trustee (disregarding any legal disability the beneficiary is under).

Note:

Division 128 deals with the effect of death.

104-75(2)  
The time of the event is when the beneficiary becomes absolutely entitled to the asset. Trustee makes a capital gain or loss

104-75(3)  


The trustee makes a capital gain if the *market value of the asset (at the time of the event) is more than its *cost base. The trustee makes a capital loss if that market value is less than the asset ' s *reduced cost base. Exception for trustee

104-75(4)  
A *capital gain or *capital loss the trustee makes is disregarded if it *acquired the asset before 20 September 1985.

Note:

There is also an exception for employee share trusts: see section 130-80 .

Beneficiary makes a capital gain or loss

104-75(5)  


The beneficiary makes a capital gain if the *market value of the asset (at the time of the event) is more than the *cost base of the beneficiary ' s interest in the trust capital to the extent it relates to the asset.

The beneficiary makes a capital loss if that market value is less than the *reduced cost base of that beneficiary ' s interest in the trust capital to the extent it relates to the asset.

Exceptions for beneficiary

104-75(6)  
A *capital gain or *capital loss the beneficiary makes is disregarded if:


(a) the beneficiary *acquired the *CGT asset that is the interest (except by way of an assignment from another entity) for no expenditure; or


(b) the beneficiary acquired it before 20 September 1985; or


(c) all or part of the capital gain or capital loss the trustee makes from the *CGT event is disregarded under Subdivision 118-B (about main residence).

Expenditure can include giving property: see section 103-5 .

Note 1:

For provisions affecting the application of Subdivision 118-B to the trustee, see sections 118-215 to 118-230 .

Note 2:

There are also exceptions for employee share trusts: see sections 130-80 and 130-90 .


 

Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited

CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.

The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.