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Edited version of your private ruling
Authorisation Number: 1012124777804
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Subject: Capital distributions from trust interest
Question:
Are you liable for any capital gains tax (CGT) on receiving a capital distribution from a trust?
Answer:
No.
This ruling applies for the following period
Year ended 30 June 2011
The scheme commenced on
28 January 1987
Relevant facts
You acquired an interest in a covenant after 20 September 1985
You received capital distributions from your interest in the covenant:
The capital distributions you received had no tax paid prior to you receiving them.
You have supplied a number of documents, which forms part of, and should be read in conjunction with, this private ruling:
Reasons for decision
You acquired an interest in the covenant after 20 September 1985 and as a result the capital gains tax (CGT) provisions will apply to you.
The capital payments that you received from the trust for your interest in the trust results in a CGT E4 event occurring. This is the case as the trustee makes a payment to you in respect of your unit or interest in the trust and some or all of the payment is not included in your assessable income.
You make a capital gain if the sum of the amounts of the non-assessable parts of the payments made in the income year made by the trustee in respect of the unit or interest is more than its cost base.
In your situation, you acquired your interest for an amount and as the sum of the non assessable distribution did not exceed that amount you have not made a capital gain.
Therefore, you are not liable for any CGT in relation to the receipt of capital distributions from the trust.