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Edited version of private advice
Authorisation Number: 1051881111367
Date of advice: 06 August 2021
Ruling
Subject: Trust resettlement
Question 1
Will the proposed amendments to the trust deed cause CGT Event E1 or E2 in section 104-55 or section 104-60 of the Income Tax Assessment Act 1997 to occur?
Answer
No. The proposed amendments to the Trust Deed will 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 proposed 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.
Question 2
Will the proposed amendments to the trust deed result in a capital gain or loss under section 102-20 of the ITAA 1997?
Answer
No. The proposed amendments to the Trust Deed will not result in a CGT event happening. Therefore, you will not make a capital gain or loss
This ruling applies for the following period:
Year ending 30 June 2022
The scheme commences on:
1 July 2021
Relevant facts and circumstances
The Trustee proposes to amend the Trust Deed to exclude a beneficiary from the Trust.
The proposed Deed of Variation will be made in accordance with a clause in the Trust Deed which provides broad powers for the Trustee to make changes to the Trust Deed.
The proposed changes are a valid exercise of power by the Trustee.
The proposed changes do not result in a GCT event happening.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-55
Income Tax Assessment Act 1997 section 104-60
Income Tax Assessment Act 1997 section 102-20