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Edited version of private advice
Authorisation Number: 1051931724149
Date of advice: 9 December 2021
Ruling
Subject: CGT - trust - absolute entitlement
Question 1
Were you absolutely entitled to the Properties at the time of Declaration of Trust?
Answer
Yes.
Question 2
For the purposes of Division 109 of the Income Tax Assessment Act 1997, did you acquire the Properties prior to 20 September 1985?
Answer
Yes.
Having considered your circumstances and the relevant factors relating to your situation the Commissioner accepts that you were absolutely entitled to the Properties at the time of the Declaration of Trust. Consequently, for capital gains tax purposes, you are considered to have acquired the Properties before 20 September 1985. Further information can be found by searching for TR 2004/D25 on the legal database on ato.gov.au
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
Prior to 20 September 1985, your parent declared in writing that they held parcels of land (the Properties) on trust for you until you reached the age of XX.
Under the terms of the Declaration of Trust, your parent:
(a) Was required to transfer the Properties to you upon reaching the age of XX years
(b) Could not mortgage, lease, or in any way dispose of and encumber the Properties without your consent, and
(c) As the trustee was to be indemnified in relation to any personal liability from the profits and income of the land or any proceeds from the sale of the land and by you
You reached the age of XX years prior to 20 September 1985 but title to the Properties was not transferred to you until 19XX.
You entered into a contract for sale in relation to part of the Properties.
The Declaration of Trust doesn't contain a remainder beneficiary for if you didn't reach the age of XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 106-50
Income Tax Assessment Act 1997 Division 109