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Edited version of private advice
Authorisation Number: 1051968281508
Date of advice: 4 April 2022
Ruling
Subject: CGT property - majority underlying interests
Question
What are the CGT consequences for the adult grandchild 'X' who now has a greater fixed entitlement of 30%?
Answer
There are no CGT consequences for the adult grandchild 'X' who now has a greater fixed entitlement of 30%.
This ruling applies for the following periods:
30 June 20XX
30 June 20XX
30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The deceased died in 19XX. A testamentary trust was created in 19XX which included the family home. The surviving spouse lived in the family home until 19XX. From 19XX to 19XX it was rented out as a commercial property.
In 19XX, the property was demolished and several new shops were constructed.
The testamentary trust had distributed fixed entitlements in accordance with the deed as follows:
• Adult Child A = 25%
• Adult Child B = 25%
• 10 Grandchildren (now adults) = 5% each
In 20XX, Adult Child A passed away, leaving their fixed entitlement to their son ('X') who was then entitled to their 25% share in accordance with the trust deed. That is, 'X' is now entitled to 30% of the income and capital of the Trust (his original 5% + parent's 25%).
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 149-10
Income Tax Assessment Act 1997 Section 149-15
Income Tax Assessment Act 1997 Section 149-30