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Edited version of private ruling
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Ruling
Subject: Capital gains tax (CGT) - deceased estate - change of trustees
Did a CGT event A1 happen when the assets of the testamentary trust were transferred from the trustee named in the Will to another entity as trustee?
No.
This ruling applies for the following period:
Income year ending 30 June 2009
The scheme commences on:
1 July 2008
Relevant facts and circumstances
The deceased passed away after 20 September 1985.
The deceased's Will outlined that the balance of their estate be held in trust for a tax-exempt entity, to be applied and determined at the discretion of the scholarship committee to provide a scholarship.
The will outlined that the shares would be conducted and controlled by the two trustees name in the deceased's Will. The First named trustee died before the deceased.
The assets held on trust were transferred from the remaining trustee to the tax-exempt entity, as trustees of the scholarship.
You have provided a copy of the will and this forms part of, and should be read in conjunction with, the private ruling.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 102-20
Income Tax Assessment Act 1997 Subsection 104-10(2)
Income Tax Assessment Act 1997 Division 128
Reasons for decision
A capital gain or loss is only made if a CGT event happens to a CGT asset. The shares that the deceased held are CGT assets.
The deceased's Will outlined that the assets making up the balance of their estate would be held in a testamentary trust by the deceased's trustees, to be applied for the provision of a scholarship by a tax-exempt entity. The assets were transferred by the deceased's trustee to the tax-exempt entity, as trustee of the scholarship.
It is considered that the change of trustee did not alter the original intentions of the deceased. Accordingly, the change of trustee will not change the beneficiaries, or the obligations of the trustee, or the terms or nature of the trust. Therefore, it is viewed that the change in trustees did not give rise to a CGT event.