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INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

Division 104 - CGT events  

Subdivision 104-E - Trusts  

SECTION 104-60  Transferring a CGT asset to a trust: CGT event E2  

104-60(1)  

 ITAA 36
CGT event E2 happens if you transfer a *CGT asset to an existing trust.

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 E2 will not happen merely because of a change in the trustee.

104-60(2)  

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The time of the event is when the asset is transferred.

104-60(3)  

 View history reference ITAA 36
You make a capital gain if the *capital proceeds from the transfer 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.

104-60(4)  

 View history reference ITAA 36
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 asset is transferred.

Exceptions

104-60(5)  

 View history reference ITAA 36
CGT event E2 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.
 View history reference

104-60(6)  

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A *capital gain or *capital loss you make is disregarded if you *acquired the asset before 20 September 1985.


 



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