Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

PART 3-3 - CAPITAL GAINS AND LOSSES: SPECIAL TOPICS

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Division 126 - Same-asset roll-overs

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Subdivision 126-G - Transfer of assets between certain trusts

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History

Subdiv 126-G inserted by No 19 of 2010, s 3 and Sch 1 item 9, applicable to CGT events happening on or after 1 November 2008. No 19 of 2010, s 3 and Sch 1 items 12 and 13 also contains the following transitional provisions:

Transitional: time for making mirror choices
(1)
Subsection 126-235(3) of the Income Tax Assessment Act 1997 does not apply if the other trust makes a mirror choice under a provision of a taxation law by:

(a) 6 months after the day this Act receives the Royal Assent [ CCH Note: assent was gained 24 March 2010]; or

(b) a later day allowed by the Commissioner of Taxation.
Note:

For this item to have effect, the other trust must still be able, under that provision of the taxation law, to make the mirror choice.

(2)
This item has effect in addition to subsection 126-235(4) of the Income Tax Assessment Act 1997 .
Transitional: deadline for giving information to beneficiaries
(1)
This item applies in relation to a roll-over chosen under Subdivision 126-G of the Income Tax Assessment Act 1997 if the transfer year for the roll-over is the transferring trust's 2008-09 income year.

(2)
Subsection 126-260(1) of that Act has effect, in relation to the roll-over, as if the reference in that subsection to 3 months after the end of the transfer year were a reference to 6 months after the day this Act receives the Royal Assent [ CCH Note: assent was gained 24 March 2010].

Operative provisions

SECTION 126-230 Beneficiaries ' entitlements not be discretionary etc.

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126-230(1)
The conditions in subsections (2) and (3) must be met:

(a) if subsection 126-225(2) applies - at all times during the period:

(i) starting at the start time; and

(ii) ending at the transfer time; and

(b) otherwise - at the transfer time.

CGT event E4 is capable of happening

126-230(2)
The first condition is met at a particular time if, at that time, *CGT event E4 is capable of happening to all of the *membership interests in each of the trusts.

Note:

A roll-over cannot be chosen if either trust is a discretionary trust.

Beneficiaries ' entitlements not discretionary

126-230(3)
The second condition is met at a particular time if, at that time, the manner or extent to which each beneficiary of each trust can benefit from the trust is not capable of being significantly affected by the exercise, or non-exercise, of a power.

126-230(4)
However, if both trusts are *managed investment trusts, disregard a power if the power ' s existence at that time does not significantly affect the *market value at that time of each *membership interest in each of the trusts.

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