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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 104-65  Converting a trust to a unit trust: CGT event E3  

104-65(1)  

 ITAA 36
CGT event E3 happens if:


(a) a trust (that is not a unit trust) over a *CGT asset is converted to a unit trust; and


(b) just before the conversion, a beneficiary under the trust was absolutely entitled to the asset as against the trustee (disregarding any legal disability the beneficiary is under).

104-65(2)  

 ITAA 36
The time of the event is when the trust is converted.

104-65(3)  

 View history reference ITAA 36
The beneficiary makes a capital gain if the *market value of the asset (when the trust is converted) is more than the asset's *cost base. The beneficiary makes a capital loss if that market value is less than the asset's *reduced cost base.

Exception

104-65(4)  

 ITAA 36
A *capital gain or *capital loss the beneficiary makes is disregarded if it *acquired the asset before 20 September 1985.


 



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