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Edited version of private advice
Authorisation Number: 1051963334740
Date of advice: 21 March 2022
Ruling
Subject: Trust resettlement
Question
Will the proposed amendments to the Trust Deed cause capital gains tax (CGT) event E1 or E2 in section 104-55 or section 104-60 of the Income Tax Assessment Act 1997 (ITAA 1997) to occur?
Answer
No, the proposed amendments to the Trust Deed will not cause CGT event E1 or E2 in section 104-55 or section 104-60 of the ITAA 1997 to occur.
This ruling applies for the following period:
1 July 20XX to 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The Trust was established by Trust Deed on X Month 20XX.
The Trust Deed provides that;
• primary beneficiaries of the Trust in the Schedule are Person B and the lineal decedents of Person B
• there are 'nil' additional members of the class general beneficiaries of the Trust in the Schedule
• other clauses make provision about general beneficiaries extending to include;
the primary beneficiaries
parent, grandparent, great-grandparent, child, grandchild, or further issue of any of the primary beneficiaries
spouse of any of the above persons and any of their parents, grandparents or great-grandparents
any blood relative of the spouse or those named above
eligible corporations, trusts, partnerships, self-managed superannuation fund and charities
employees or prior employees of any of the above or the Trustee
education institutions or health providers of the persons identified above
any other person, company, trustee, club or association which the Trustee may nominate.
The proposed Deed of Variation has not yet been executed but is to be made in accordance the Trust Deed which provides powers for the Trustee to make changes including to exclude beneficiaries.
The proposed variation is to amend the Trust Deed to;
• update name Person A
• make Person A, as well as any spouse or lineal decedents of Person A and lineal decedents of any spouse of Person A all excluded beneficiaries together with any corporation or trustee of a trust of which any of these persons has an interest
• place limitations on access by beneficiaries to communications and documentation that the Trustee has relied on.
Relevant legislative provisions
Sections 104-55, 104-60, 149-10, 149-15 and 149-30 of the ITAA 1997.
Sections 160ZZS and 82KXC(1) of the Income Tax Assessment Act 1936
Section 357-60 of Schedule 1 to the Taxation Administration Act 1953