Income Tax Assessment Act 1997



Division 104 - CGT events  

Subdivision 104-E - Trusts  

SECTION 104-85   Disposal to beneficiary to end capital interest: CGT event E7  

CGT event E7 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 interest, or part of it, in the trust capital.


Division 128 deals with the effect of death.

The time of the event is when the disposal occurs. Trustee makes a capital gain or loss


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

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


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 interest, or the part of it, being satisfied. The beneficiary makes a capital loss if that market value is less than the *reduced cost base of that interest or part. Exceptions for beneficiary

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 is also an exception for employee share trusts: see section 130-90 .


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