Income Tax Assessment Act 1997
View history note
Hide history noteCGT event E1 happens if you create a trust over a *CGT asset by declaration or settlement.
Note:
A change in the trustee of a trust does not constitute a change in the entity that is the trustee of the trust (see subsection 960-100(2) ). This means that CGT event E1 will not happen merely because of a change in the trustee.
104-55(2)
The time of the event is when the trust over the asset is created.
104-55(3)
You make a capital gain if the *capital proceeds from the creation are more than the asset ' s *cost base. You make a capital loss if those capital proceeds are less than the asset ' s *reduced cost base.
Cost base rule
104-55(4)
If you are the trustee of the trust and no beneficiary is absolutely entitled to the asset as against you (disregarding any legal disability), the first element of the asset ' s *cost base and *reduced cost base in your hands is its *market value when the trust is created.
Exceptions
104-55(5)
CGT event E1 does not happen if you are the sole beneficiary of the trust and:
(a) you are absolutely entitled to the asset as against the trustee (disregarding any legal disability); and
(b) the trust is not a unit trust.
104-55(6)
A *capital gain or *capital loss you make is disregarded if you *acquired the asset before 20 September 1985.
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