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Edited version of private advice
Authorisation Number: 1051903473328
Date of advice: 8 October 2021
Ruling
Subject: Trust resettlement
Question
Will the application made by the Trustee to the Court seeking an order that the vesting date for the Trust be extended 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 (ITAA 1997) to happen?
Answer
No. The 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 extension to the vesting date of the Trust, approved by the Court, will not extinguish the continuity of the trust property or corpus and therefore, will not cause CGT event E1 or E2 in section 104-55 or section 104-60 of the ITAA 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 was settled by deed (the Deed of Settlement), and a trustee was appointed who has acted continuously as the trustee of the Trust since the date of settlement.
The Trust has operated a business for many years through the Trust.
The Deed of Settlement provides when the day of distribution of the Trust (i.e., the vesting day) occurs and the Trust has not yet come to an end.
The trustee seeks for the vesting date of the Trust to be extended by court order so it can continue to carry on the business in the Trust.
An Originating Motion was filed with the Supreme Court, commencing the proceeding pursuant to: (a) r 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 for the determination of questions arising in the execution of the Trust; and (b) sections 63 and 63A of the Trustee Act 1958 (Vic).
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 104-55
Income Tax Assessment Act 1997 Section 104-60