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Ruling
Subject: Restructure and liquidation of the Head Co tax consolidated group
The Commissioner was asked whether:
· a capital gain, that is not disregarded, will be made in relation to the units held by the trust as a result of the receipt of its share of the liquidator's distribution.
· the trustee of the trust will be assessed and liable to pay tax on any part of the net income of the trust in respect of the restructure.
· the trustee will be assessed and liable to any family trust distribution tax under Division 271 of Schedule F of the ITAA 1936 in respect of the dividend or liquidator's dividend to Purchaser Co.
The Commissioner ruled that:
· a capital gain that is not disregarded will not be made as a result of the trust's receipt of the share of the liquidator's distribution.
· the trustee of the trust will not be assessed on any part of the 'net income' as defined in subsection 95(1) of the ITAA 1936 as a result of the restructure.
· the trustee of the trust will not be liable to pay family trust distribution tax under Division 271 of the ITAA 1936 on the amount that it will distribute to Purchaser Co.