Income Tax Assessment Act 1997
CGT event E6 happens if the trustee of a trust (except a unit trust or a trust to which Division 128 applies) *disposes of a *CGT asset of the trust to a beneficiary in satisfaction of the beneficiary's right, or part of it, to receive *ordinary income or *statutory income from the trust.
Division 128 deals with the effect of death.104-80(2)
The time of the event is when the disposal occurs. Trustee makes a capital gain or loss 104-80(3)
The trustee makes a capital gain if the *market value of the asset (at the time of the disposal) is more than its *cost base. It makes a capital loss if that market value is less than the asset's *reduced cost base. Exception for trustee 104-80(4)
A *capital gain or *capital loss the trustee makes is disregarded if it *acquired the asset before 20 September 1985. Beneficiary makes a capital gain or loss 104-80(5)
The beneficiary makes a capital gain if the *market value of the asset (at the time of the disposal) is more than the *cost base of the right, or the part of it. The beneficiary makes a capital loss if that market value is less than the *reduced cost base of the right or part.
If the beneficiary did not pay anything for the right, the market value substitution rule does not apply: see section 112-20 .Exception for beneficiary 104-80(6)
A *capital gain or *capital loss the beneficiary makes is disregarded if it *acquired the *CGT asset that is the right before 20 September 1985.
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