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Edited version of private advice
Authorisation Number: 1051908342813
Date of advice: 11 October 2021
Ruling
Subject: Trust resettlement
Question
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 happen?
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.
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, and the Vesting Day is in the deed.
The proposed Deed of Variation will replace the parents with their children as the specified beneficiaries.
The purpose of the proposed Deed of Variation is to alleviate the parents from the administrative burdens. Due to their age, they are no longer involved with the day-to-day activities of the trust. The requirements place a significant burden on the specified beneficiaries.
As a result of the proposed Deed of Variation a new class of "General Beneficiaries" will be introduced to the trust. A class of beneficiaries will be also be removed
The proposed Deed to include an additional class of beneficiaries, is a valid power of the trustee conferred by Clause to vary items in the schedule to include an additional class of beneficiaries.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 104-55
Income Tax Assessment Act 1997 Section 104-60