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Edited version of private advice
Authorisation Number: 1051857803958
Date of advice: 26 June 2021
Ruling
Subject: Trust resettlement
Question
Will the amendments to the Trust Deed cause the existing trust to terminate and a new trust to arise for trust law purposes, causing CGT event E1 or E2 in section 104-55 or section 104-60 of the Income Tax Assessment Act 1997 to happen?
Answer
No. The execution of the Deed of Rectification did not cause the Trust to terminate or give rise to a particular asset of the Trust being settled on terms of a different trust. The amendments are considered within the powers of the Trustee as contained in the Trust Deed and therefore, will not cause CGT event E1 or E2 in section 104-55 or section 104-60 of the Income Tax Assessment Act 1997 to happen
This ruling applies for the following period:
Year ended 30 June XXXX
The scheme commences on:
1 July XXXX
Relevant facts and circumstances
The Trust deed was written in XXXX where there was an error in the Trust deed.
The Trust was settled.
Since settlement, the Trust has only acquired property and no distributions of income or capital have been made to the beneficiaries.
The errors in the Trust deed were not identified until XXXX.
You have now executed a deed of Rectification to correct the error in the Trust deed.
There have been no other previous deeds of variation.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 104-55
Income Tax Assessment Act 1997 Section 104-60