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Edited version of private advice
Authorisation Number: 1051926144788
Date of advice: 24 November 2021
Ruling
Subject: Trust vesting
Question 1
Will capital gains tax (CGT) event A1, CGT event E1 or CGT event E5 happen to the Trustee when the Trust vests?
Answer
No. Although a trust vests, it does not cause the trust to end, or a new trust to exist. In this case, the actions of the Trustee do not demonstrate that when the Trust vested, CGT event A1, E1 or E5 happened. Further information on the trust law and taxation consequences can be found at TR 2018/6 Income tax: trust vesting - consequences of a trust vesting.
Question 2
Will CGT event A1, CGT event E1 or CGT event E5 happen to the beneficiaries of the Trust when the Trust vests?
Answer
No. As shown above, CGT event A1, E1 or E5 will not happen for the Trustee. Accordingly, these events will not happen to the beneficiaries. Further information can be found at TR 2018/6 Income tax: trust vesting - consequences of a trust vesting.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The Trust was established on X month 19XX.
The Vesting Day is included in the Trust Deed.
As from the Vesting Day the Trustee stands possessed of the Trust Fund and the income thereof.
None of the beneficiaries have or will acquire their interest in a Trust Asset for expenditure.
The Trustee did not make a determination prior to the Vesting Day to appoint or pay or apply the capital of the Trust Fund in favour of a beneficiary or to resettle it.
Relevant legislative provisions
Income Tax Assessment Act 1997 - section 104-10
Income Tax Assessment Act 1997 - section 104-55
Income Tax Assessment Act 1997 - section 104-75