Income Tax Assessment Act 1997
View history note
Hide history noteCGT event E7 happens if the trustee of a trust (except a unit trust or a trust to which Division 128 applies) *disposes of a *CGT asset of the trust to a beneficiary in satisfaction of the beneficiary's interest, or part of it, in the trust capital.
Note:
Division 128 deals with the effect of death.
104-85(2)
The time of the event is when the disposal occurs.
Trustee makes a capital gain or loss
104-85(3)
The trustee makes a capital gain if the *market value of the asset (at the time of the disposal) is more than its *cost base. It makes a capital loss if that market value is less than the asset's *reduced cost base.
Exception for trustee
104-85(4)
A *capital gain or *capital loss the trustee makes is disregarded if it *acquired the asset before 20 September 1985.
Beneficiary makes a capital gain or loss
104-85(5)
The beneficiary makes a capital gain if the *market value of the asset (at the time of the disposal) is more than the *cost base of the interest, or the part of it, being satisfied. The beneficiary makes a capital loss if that market value is less than the *reduced cost base of that interest or part.
Exceptions for beneficiary
104-85(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 is also an exception for employee share trusts: see section 130-90 .
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