Income Tax Assessment Act 1997
View history note
Hide history noteCGT event E5 happens if a beneficiary becomes absolutely entitled to a *CGT asset of a trust (except a unit trust or a trust to which Division 128 applies) as against the trustee (disregarding any legal disability the beneficiary is under).
Note:
Division 128 deals with the effect of death.
104-75(2)
The time of the event is when the beneficiary becomes absolutely entitled to the asset.
Trustee makes a capital gain or loss
104-75(3)
The trustee makes a capital gain if the *market value of the asset (at the time of the event) is more than its *cost base. The trustee makes a capital loss if that market value is less than the asset ' s *reduced cost base.
Exception for trustee
104-75(4)
A *capital gain or *capital loss the trustee makes is disregarded if it *acquired the asset before 20 September 1985.
Note:
There is also an exception for employee share trusts: see section 130-80 .
Beneficiary makes a capital gain or loss
104-75(5)
The beneficiary makes a capital gain if the *market value of the asset (at the time of the event) is more than the *cost base of the beneficiary ' s interest in the trust capital to the extent it relates to the asset.
The beneficiary makes a capital loss if that market value is less than the *reduced cost base of that beneficiary ' s interest in the trust capital to the extent it relates to the asset.
Exceptions for beneficiary
104-75(6)
A *capital gain or *capital loss the beneficiary makes is disregarded if:
(a) the beneficiary *acquired the *CGT asset that is the interest (except by way of an assignment from another entity) for no expenditure; or
(b) the beneficiary acquired it before 20 September 1985; or
(c) all or part of the capital gain or capital loss the trustee makes from the *CGT event is disregarded under Subdivision 118-B (about main residence).
Expenditure can include giving property: see section 103-5 .
Note 1:
For provisions affecting the application of Subdivision 118-B to the trustee, see sections 118-215 to 118-230 .
Note 2:
There are also exceptions for employee share trusts: see sections 130-80 and 130-90 .
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