INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 6 - Trusts other than unit trusts  

SECTION 160ZX   PERSON BECOMING ENTITLED TO BENEFICIAL OWNERSHIP OF TRUST ASSET  

160ZX(1)   [Deemed disposal to absolutely entitled beneficiary]  

Where -

(a) an asset is held by a person as trustee otherwise than as trustee of a unit trust or of the estate of a deceased person; and

(b) a beneficiary under the trust becomes absolutely entitled to the asset as against the trustee,

the trustee shall be deemed, for the purposes of this Part, to have disposed of the asset to the beneficiary at the time when the beneficiary became so entitled.

160ZX(2)   [Scope of subsec (3)-(5)]  

Where -

(a) a trustee of a trust estate is deemed by subsection (1) to have disposed of an asset to a beneficiary; or

(b) a trustee of a trust estate other than the estate of a unit trust or of a trust that arose upon or resulted from the death of a person disposes of an asset of the trust estate to a beneficiary in satisfaction of the interest or part of the interest of the beneficiary in the corpus of the trust estate,

the following provisions of this section have effect.

160ZX(3)   [Deemed consideration for disposal - trustee]  

The trustee shall be deemed for the purposes of this Part to have disposed of the asset to the beneficiary for a consideration equal to the market value of the asset at the time of the disposal.

160ZX(4)   [Deemed consideration for disposal - beneficiary]  

The beneficiary shall be deemed to have, at the time when the asset was disposed of, disposed of -

(a) in a case to which paragraph (2)(a) applies - the interest of the beneficiary in the corpus of the trust estate to the extent to which the interest was constituted by the asset; or

(b) in a case to which paragraph (2)(b) applies - the interest or part of the interest of the beneficiary in the corpus of the trust estate that is referred to in that paragraph,

for a consideration equal to the market value of the asset at the time of the disposal of the asset.

160ZX(5)   [Indexed cost base to beneficiary]  

If the beneficiary did not pay or give any consideration in respect of the acquisition of the interest or part of the interest referred to in subsection (4) and did not acquire the interest or part of the interest by way of assignment from another person, the indexed cost base to the beneficiary in respect of the acquisition of the interest or part of the interest shall be deemed to be an amount equal to the market value of the asset at the time of the disposal of the asset.