Private ruling: Proposed restructure
Date of advice: 14 July 2021
Published: September 2021
Ruling period: The income year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Does the Commissioner think it is reasonable to assume that, for the purposes of subsection 149-30(2) of the Income Tax Assessment Act 1997 (ITAA 1997), the majority underlying interests in the Goodwill of the Business and other business assets acquired before 20 September 1985 by the Trustee have been had at all times on and after 20 September 1985, by the same ultimate owners who had such interests before 20 September 1985 and therefore remain pre-CGT assets? | A1: Yes | Q2: Will the Proposed Restructure involving the transfer of assets of the Business from the Trustee of Trust A to NewCo qualify for rollover relief under Subdivision 328-G of the ITAA 1997? | A2: Yes

Relevant facts and circumstances: The Business commenced before 20 September 1985. The Business is operated through Trust A. Trust A is a discretionary trust. Trust A has a family trust election (FTE) in place with Individual A (who is deceased) listed as the specified individual. The Company is the trustee of Trust A (the Trustee). Individual B and Individual C are the directors of and hold all of the shares in the Company. The Trustee of Trust A has made distributions only to beneficiaries who are members of Individual A's family group in accordance with the FTE in place. The Trustee of Trust A proposes to transfer the assets of its Business into a newly established company, NewCo (the Proposed Restructure). The ordinary shares in NewCo will be issued in equal numbers to two newly established family trusts, Family Trust B and Family Trust C. Family Trust B will be a discretionary trust with a corporate trustee. Individual B will be the sole director and shareholder of the trustee company. Family Trust B will make an FTEwith Individual B as the specified individual. Family Trust C will be a discretionary trust with a corporate trustee. Individual C will be the sole director and shareholder of the trustee company. Family Trust C will make an FTEwith Individual C as the specified individual. The trust deeds of Family Trust B and Family Trust C will exclude as a potential object any beneficiary who is not a member of the family group (as defined in section 272-90 of Schedule 2F to the Income Tax Assessment Act 1936 (ITAA 1936)) of Individual A. Distributions and conferrals by the trustees of Trust A, Family Trust B and Family Trust C will only be made to members of the family group (as defined in section 272-90 of Schedule 2F to the ITAA 1936) of Individual A. In the three-year period after the Proposed Restructure takes effect, there will be no change in the ultimate economic ownership of any significant assets of the Business, those assets will continue to be active assets, and there will be no significant or material use of those assets for private purposes. The Trustee of Trust A and NewCo will choose to apply the roll-over under Subdivision 328-G of the ITAA 1997 in relation to the assets transferred under the Proposed Restructure. The Trustee of Trust A and NewCo are residents of Australia. The Proposed Restructure will occur during the income year ended 30 June 20XX. The aggregated turnover of Trust A for the income year ending 30 June 20XX was less than $XX million. The aggregated turnover of Trust A for the income year ended 30 June 20XX will be less than $XX million.

Relevant legislative provisions: Income Tax Assessment Act 1936 schedule 2F | Income Tax Assessment Act 1936 section 272-80 of Schedule 2F | Income Tax Assessment Act 1936 section 272-90 of Schedule 2F | Income Tax Assessment Act 1997 section 149-15 | Income Tax Assessment Act 1997 section 149-30 | Income Tax Assessment Act 1997 section 328-110 | Income Tax Assessment Act 1997 section 328-125 | Income Tax Assessment Act 1997 Subdivision 328-G | Income Tax Assessment Act 1997 section 328-430 | Income Tax Assessment Act 1997 section 328-435 | Income Tax Assessment Act 1997 section 328-440

Reasons for decision: Summary: As the Trustee has continued to administer Trust A for the benefit of Individual A and their immediate family since before 20 September 1985, the Commissioner considers it reasonable to assume that, for the purposes of subsection 149-30(2) of the ITAA 1997, the majority underlying interests in the Goodwill of the Business and other business assets acquired before 20 September 1985 by the Trustee of Trust A have been had at all times on and after 20 September 1985, by the same ultimate owners who had such interests before 20 September 1985 and therefore remain pre-CGT assets. | Detailed Reasoning - Change in majority underlying interests: Although the Goodwill of the Business was acquired before 20 September 1985, in accordance with Division 149 of the ITAA 1997, the pre-CGT status of a CGT asset (including goodwill) owned by a company or trust can be lost if the 'majority underlying interests' in a CGT asset are not had by the same 'ultimate owners' who had the majority underlying interests in the CGT asset immediately before 20 September 1985 (subsection 149-30(1) of the ITAA 1997). Majority underlying interests is defined in subsection 149-15(1) of the ITAA 1997 as more than 50% of the beneficial interests that ultimate owners have (whether directly or indirectly) in: • the asset; and • any ordinary income that may be derived from the asset. Subsection 149-15(2) of the ITAA 1997 provides that an 'underlying interest' means a beneficial interest that an ultimate owner may have in the asset or any ordinary income derived from the asset. An ultimate owner is defined to include an individual under subsection 149-15(3) of the ITAA 1997. An ultimate owner indirectly has a beneficial interest in a CGT asset of another entity (that is not an ultimate owner) if they would receive for their own benefit any of the capital of the other entity if: • the other entity were to distribute any of its capital; and Section 149-15 of the ITAA 1997 provides: (1) Majority underlying interests in a *CGT asset consist of: (a) more than 50% of the beneficial interests that *ultimate owners have (whether directly or *indirectly) in the asset; and (b) more than 50% of the beneficial interests that *ultimate owners have (whether directly or *indirectly) in any *ordinary income that may be *derived from the asset. (2) An underlying interest in a *CGT asset is a beneficial interest that an ultimate owner has (whether directly or *indirectly) in the asset or in any *ordinary income that may be *derived from the asset. (3) An ultimate owner is: (a) an individual; or (b) a company whose *constitution prevents it from making any distribution, whether in money, property or otherwise, to its members; or (c)...; (4) An *ultimate owner indirectly has a beneficial interest in a *CGT asset of another entity (that is not an *ultimate owner) if he, she or it would receive for his, her or its own benefit any of the capital of the other entity if: (a) the other entity were to distribute any of its capital; and (b) the capital were then successively distributed by each entity interposed between the other entity and the ultimate owner. (5) An *ultimate owner indirectly has a beneficial interest in *ordinary income that may be *derived from a *CGT asset of another entity (that is not an *ultimate owner) if he, she or it would receive for his, her or its own benefit any of a *dividend or income if: (a) the other entity were to pay that dividend, or otherwise distribute that income; and (b) the dividend or income were then successively paid or distributed by each entity interposed between the other entity and the ultimate owner. Subsection 149-30(2) of the ITAA 1997 provides the Commissioner with a discretion to overlook the factual test in subsection 149-30(1) of the ITAA 1997 if he is satisfied, or thinks it reasonable to assume, that at all times after 20 September 1985 when the asset was held by the taxpayer, majority underlying interests in the asset were held by a natural person who, immediately before that date, held majority underlying interests in the asset. | Detailed Reasoning - Discretionary trusts and majority underlying interests: Relevant to the current circumstances, Taxation Ruling IT 2340 Income tax: capital gains: deemed acquisition of assets by a taxpayer after 19 September 1985 where a change occurs in the underlying ownership of assets acquired by the taxpayer on or before that date discusses the terms underlying interest and majority underlying interest, and former section 160ZZS of the ITAA 1936(since replaced by section 149-30 of the ITAA 1997). Paragraph 2 of IT 2340 advocates a look through approach in relation to chains of companies, partnerships and trusts in order to determine whether there has been a change in the effective interests of natural persons in the assets. Where a CGT asset is held by the trustee of a discretionary trust, the CGT asset is not beneficially owned by any persons. This creates difficulties when assessing whether the majority underlying beneficial interest in an asset is maintained. IT 2340 however sets out the Commissioner's approach in respect of 'looking through' discretionary family trusts to determine whether majority underlying interests have been maintained in the assets of the trust, as follows: 5. In relation to what are generally referred to as discretionary trusts, i.e. family trusts, the trustees of which have discretionary powers as to the distribution of trust income or property to beneficiaries, in considering the question of whether majority underlying interests have been maintained in the assets of the trust it will be relevant to take into account the way in which the discretionary powers of the trustees are in fact exercised. 6. Where a trustee continues to administer a trust for the benefit of members of a particular family, for example, it will not bring section 160ZZS into application merely because distributions to members who are beneficiaries are made in such amounts and to such of those beneficiaries as the trustee determines in the exercise of his discretion. 7. In such a case the Commissioner would, in terms of subsection 160ZZS(1), find it reasonable to assume that for all practical purposes the majority underlying interests in the trust assets have not changed. That is consistent with the role of the section to close potential avenues for avoidance of tax in cases where there is a substantial change in underlying ownership of assets and the legislative guidance contained in Subdivision G of Division 3 of Part III of the Act. On that basis, trust assets acquired by the trustee before 20 September 1985 would remain outside the scope of the capital gains and losses provisions of the Act. The expression 'beneficial interests' as used in the definition of 'majority underlying interests' is not defined. At general law, a shareholder does not have any legal or equitable interest in the asset of a company. Similarly, beneficiaries in a discretionary trust do not have an interest, either individually or collectively, in the assets or the income of a trust. This situation is addressed in ATO Interpretive Decision ATO ID 2003/778 Income Tax CGT: majority underlying ownership and deceased estate - discretionary trust - beneficiary a 'new owner ': 'Under ordinary legal concepts, where there is a discretionary trust deed, no beneficiary is entitled to income or capital of the trust until the trustee exercises its discretion to distribute income or to make an appointment of capital. Because the beneficiary of a discretionary trust does not hold an interest in any asset of the trust or in the ordinary income derived from the asset until the trustee's discretion is exercised, it would not be possible for a discretionary trust to satisfy the continuing majority underlying interests test set out in subsection 149-30(1) of the ITAA 1997. Taxation Ruling IT 2340 reflects on an approach of looking through interposed entities to determine which natural persons hold the beneficial interests for the purposes of section 160ZZS of the Income Tax Assessment Act 1936 (ITAA 1936), which preceded Division 149 of the ITAA 1997, is reflected in Taxation Ruling IT 2340. Among other issues, IT 2340 deals with questions regarding the application of section 160ZZS of the ITAA 1936 'to assets held by trustees of family trusts where the trustees are vested with discretionary powers as to distributions from the trusts.' | Detailed Reasoning - Application to the current circumstances: In the current circumstances, the Goodwill of the Business and other business assets acquired before 20 September 1985 will remain pre-CGT assets if the majority underlying interests in these CGT assets are had by the same ultimate owners who had the majority underlying interests in them immediately before 20 September 1985. | Detailed Reasoning - Just prior to 20 September 1985: In this case, the owner of the CGT assets (including Goodwill) of the Business immediately before 20 September 1985 was the Trustee of Trust A. Trust A is a discretionary trust. Accordingly, as noted above, it would not be possible for a discretionary trust to satisfy the continuing majority underlying interests test set out in subsection 149-30(1) of the ITAA 1997. However, in accordance with the approach outlined in IT 2340 as detailed above, where a trustee continues to administer a trust for the benefit of members of a particular family, the Commissioner may find it reasonable to assume that for all practical purposes the majority underlying interests in the trust assets have not changed. | Detailed Reasoning - From 20 September 1985 to the disposal date: Based on the information provided, it is accepted that since 20 September 1985, the Trustee of Trust A has continued to administer the trust for the benefit of Individual A and their immediate family. It is noted that the family group of Individual A meets the definition of a particular family, as provided in paragraph 6 of IT 2340, and the Trustee has not exercised discretionary powers to appoint beneficiaries not of the same family as the existing beneficiaries. Therefore, in accordance with paragraph 7 of IT 2340, the Commissioner considers, for the purposes of section 149-30 of the ITAA 1997, it reasonable to assume that for all practical purposes the majority underlying interests in this trust's assets have not changed. On the basis that the ultimate beneficial owners of the underlying assets of Trust A have been had by the same family, the Commissioner considers it reasonable to assume for the purposes of subsection 149-30(2) of the ITAA 1997, that the majority underlying interests in the Goodwill of the Business and other business assets acquired before 20 September 1985 have been had at all times on and after 20 September 1985, by the same ultimate owners who had such interests before 20 September 1985. Accordingly the Goodwill of the Business and other business assets acquired before 20 September 1985 by the Trustee of Trust A will remain pre-CGT assets. | Summary: The Proposed Restructure involving the transfer of assets of the Business from the Trustee of Trust A to NewCo will qualify for rollover relief under Subdivision 328-G of the ITAA 1997. | Detailed Reasoning - Detailed reasoning: The rollover under Subdivision 328-G of the ITAA 1997 is designed to facilitate flexibility for owners of small business entities to restructure their business, and the way their business assets are held, while disregarding the tax gains and losses that would otherwise arise. The following six conditions, set-out in section 328-430 of the ITAA 1997, need to be satisfied in order for roll-over under Subdivision 328-G of the ITAA 1997 to be available: • condition 1: the transaction must be part of a genuine restructure of an ongoing business (paragraph 328-430(1)(a) of the ITAA 1997). • condition 2: the small business entity condition (paragraph 328-430(1)(b) of the ITAA 1997). • condition 3: there is no change in ultimate economic ownership of the assets (paragraph 328-430(1)(c) of the ITAA 1997). • condition 4: the asset being transferred is a CGT asset that is an active asset (paragraph 328-430(1)(d) of the ITAA 1997). • condition 5: both the transferor and each transferee must be residents of Australia (paragraph 328-430(1)(e) of the ITAA 1997). • condition 6: both the transferor and transferee must choose to apply the roll-over (paragraph 328-430(1)(f) of the ITAA 1997). | Detailed Reasoning - Condition 1: the transaction must be part of a genuine restructure of an ongoing business (paragraph 328-430(1)(a) of the ITAA 1997): Paragraph 328-430(1)(a) of the ITAA 1997 requires that the transaction is, or is part of, a genuine restructure of an ongoing business. Whether a transaction is or is part of a 'genuine restructure of an ongoing business' is a question of fact that is determined having regard to all of the circumstances surrounding the restructure. Law Companion Ruling LCR 2016/3 Small Business Restructure Roll-over: genuine restructure of an ongoing business and related matters provides guidance on whether a transaction will be part of a 'genuine restructure of an ongoing business'. Paragraph 6 of LCR 2016/3, in part, explains that a genuine restructure of an ongoing business is one that could be reasonably expected to deliver benefits to small business owners in respect of their efficient conduct of the business. It can encompass a restructure of the way in which business assets are held where that structure is likely to have been adopted had the business owners obtained appropriate professional advice when setting up the business. | Detailed Reasoning - Safe harbour rule: Section 328-435 of the ITAA 1997 contains a safe harbour rule that provides an alternative way to meet the 'genuine restructure of an ongoing business' condition. Where the safe harbour rule is satisfied, it is not necessary to consider whether the arrangement would otherwise be a 'genuine restructure of an ongoing business' under paragraph 328-430(1)(a) of the ITAA 1997 (as highlighted in paragraph 78 of LCR 2016/3). Section 328-435 of the ITAA 1997 states: For the purposes of paragraph 328-430(1)(a) (but without limiting that paragraph), a transaction is, or is a part of, a genuine restructure of an ongoing *business if, in the 3 year period after the transaction takes effect: (a) there is no change in ultimate economic ownership of any of the significant assets of the business (other than *trading stock) that were transferred under the transaction; and (b) those significant assets continue to be *active assets; and (c) there is no significant or material use of those significant assets for private purposes. In the current circumstances, the Applicant has advised that in the three-year period after the Proposed Restructure takes effect: • there will be no change in the ultimate economic ownership of any significant assets of the Business; • those assets will continue to be active assets; and • there will be no significant or material use of those assets for private purposes. Based on these statements, the safe harbour rule in section 328-435 of the ITAA 1997 will be satisfied. Therefore, for the purposes of paragraph 328-430(1)(a) of the ITAA 1997, the Proposed Restructure will be treated as a genuine restructure of an ongoing business therefore satisfying this condition. | Detailed Reasoning - Condition 2: the small business entity condition (paragraph 328-430(1)(b) of the ITAA 1997: To satisfy this condition, both the transferor and transferee must be one or more of the following: (i) a small business entity for the income year during which the transfer occurred (ii) an entity which has an affiliate that is a small business entity for the year in which the transfer occurred (iii) an entity which is connected with an entity that is a small business entity for the year in which the transfer occurred, or (iv) be a partner in a partnership that is a small business entity for the year in which the transfer occurred. | Detailed Reasoning - Transferor - The Trustee of Trust A: Subsection 328-110(1) of the ITAA 1997 provides that you are a small business entity for an income year if: (a) you carry on a *business in the current year; and (b) one or both of the following applies: (i) you carried on a business in the income year (the previous year) before the current year and your *aggregated turnover for the previous year was less than $10 million; (ii) your aggregated turnover for the current year is likely to be less than $10 million. The Proposed Restructure will be undertaken in the income year ended 30 June 20XX. The Trustee of Trust A will be a small business entity because it carried on a business in the income year ended 30 June 20XX (per paragraph 328-110(1)(a) of the ITAA 1997) and its aggregate turnover for the income year ended 30 June 20XX was less than $10 million (per subparagraph 328-110(1)(b)(i) of the ITAA 1997). | Detailed Reasoning - Transferee- NewCo: To satisfy this small business entity condition, the transferee, NewCo, must also be one or more of the following: (i) a small business entity for the income year during which the transfer occurred; (ii) an entity which has an affiliate that is a small business entity for the year in which the transfer occurred (iii) an entity which is connected with an entity that is a small business entity for the year in which the transfer occurred, or (iv) be a partner in a partnership that is a small business entity for the year in which the transfer occurred. In the current circumstances, based on the information provided, it is considered that NewCo would satisfy the small business entity condition, under subparagraph 328-430(1)(b)(iii) of the ITAA 1997, on the basis that it is connected with an entity (the Trustee of Trust A) that is a small business entity for the year in which the transfer occurred. This is because both NewCo and Trust A are connected, per paragraph 328-125(1)(b) of the ITAA 1997, since both entities are controlled by the same third entity i.e. either Individual B or Individual C. Because both the Trustee of Trust A and NewCo each satisfy one of the small business entity tests in paragraph 328-430(1)(b) of the ITAA 1997, Condition 2 will be satisfied. | Detailed Reasoning - Condition 3: there is no material change in the ultimate economic ownership of the transferred assets (paragraph 328-430(1)(c) of the ITAA 1997): Paragraph 328-430(1)(c) of the ITAA 1997 requires the transaction to not have the effect of materially changing which individual has, or which individuals have, the ultimate economic ownership of the assets. Additionally, where more than one individual holds the ultimate economic ownership of the asset, each individual's share of that ownership must not materially change. Beneficiaries of a discretionary trust cannot have ultimate economic ownership of the assets of the trust. Under ordinary legal concepts, a beneficiary of a discretionary trust is not entitled to income or capital of the trust until the trustee exercises their discretion to distribute income or to make an appointment of capital. As a beneficiary of a discretionary trust does not hold an interest in any asset of the trust, it cannot be said that any beneficiary of a discretionary trust will have ultimate economic ownership for the purpose of paragraph 328-430(1)(c) of the ITAA 1997. | Detailed Reasoning - Alternative ultimate economic ownership test for discretionary trusts: Section 328-440 of the ITAA 1997 therefore contains an alternative ultimate economic ownership test for discretionary trusts. Section 328-440 of the ITAA 1997 states that for the purposes of paragraph 328-430(1)(c) of the ITAA 1997, a transaction does not have the effect of changing the ultimate economic ownership of an asset, or any individual's share of that ultimate economic ownership, if the requirements in that section are satisfied. Section 328-440 of the ITAA 1997 specifically states: For the purposes of paragraph 328-430(1)(c), a transaction does not have the effect of changing the ultimate economic ownership of an asset, or any individual's share of that ultimate economic ownership, if: (a) either or both of the following applies: (i) just before the transaction takes effect, the asset is included in the property of a non-fixed trust that is a family trust; (ii) just after the transaction takes effect, the asset is included in the property of a non-fixed trust that is a family trust; and (b) every individual who, just before the transfer took effect, had the ultimate economic ownership of the asset was a member of the family group (within the meaning of Schedule 2F to the Income Tax Assessment Act 1936) relating to the trust or trusts referred to in paragraph (a); and (c) every individual who, just after the transfer takes effect, has the ultimate economic ownership of the asset is a member of that family group. | Detailed Reasoning - (a) (i) Will the asset be included in the property of a non-fixed trust that was a family trust just before the proposed transaction takes place?: Trust A is a non-fixed trust for the purposes of section 272-70 of Schedule 2F to the ITAA 1936. Trust A has made a family trust election under section 272-80 of Schedule 2F to the ITAA 1936 before the Proposed Restructure. Therefore, the assets of the Business are, and will be owned by the Trustee of Trust A, a family trust, immediately before the Proposed Restructure takes place. Therefore, subparagraph 328-440(a)(i) of the ITAA 1997 will be satisfied. | Detailed Reasoning - (a) (ii) Will the asset be included in the property of a non-fixed trust that was a family trust just after the proposed transaction takes place?: The assets of the Business will not be owned by a non-fixed trust that was a family trust just after the proposed transaction takes place as they will be owned directly by NewCo. According subparagraph 328-440(a)(ii) of the ITAA 1997 is not satisfied nor relevant. ( b) Every individual who, just before the proposed transfer takes effect, had the ultimate economic ownership of the asset was a member of the family group (within the meaning of Schedule 2F to the ITAA 1936) relating to the trust referred to in paragraph (a) The alternative test is available when assets are included in the property of a non-fixed trust that is a family trust (i.e. a non-fixed trust for which there is an FTE in force). An assumption is included in this ruling that distributions and conferrals by Trust A will only be made to members of the family group (as defined in section 272-90 of Schedule 2F to the ITAA 1936) of Individual A. Therefore, although the class of beneficiaries contained in the deed of settlement are potentially wider than Individual A's family group, the economic owners of the income and capital of this trust will be members of Individual A's family group. As such, paragraph 328-440(b) of the ITAA 1997 will be satisfied. | Detailed Reasoning - (c) Every individual who, just after the transfer takes effect, has the ultimate economic ownership of the asset, is a member of that family group?: An assumption is included in this ruling that distributions and conferrals by the trustees of Trust A, Family Trust B and Family Trust C will only be made to members of the family group (as defined in section 272-90 of Schedule 2F to the ITAA 1936) of Individual A. In addition, the trust deeds of Family Trust B and Family Trust C will also exclude as a potential object any beneficiary who is not a member of the Family Group (as defined in section 272-90 of Schedule 2F to the ITAA 1936) of Individual A . Accordingly, the requirements in paragraph 328-440(c) of the ITAA 1997 will be satisfied. As the relevant conditions in section 328-440 of the ITAA 1997 are met, the requirements of Condition 3 in paragraph 328-430(1)(c) of the ITAA 1997 will also be satisfied. | Detailed Reasoning - Condition 4: The asset being transferred is a CGT asset that is an active asset (paragraph 328-430(1)(d) of the ITAA 1997): Paragraph 328-430(1)(d) of the ITAA 1997 requires that the asset being transferred is a CGT asset that is an active asset, other than a depreciating asset, at the time of the transfer. A tangible or intangible CGT asset is an active asset if the taxpayer owns the asset and it is used, or held ready for use, in a business carried on by the taxpayer. The CGT assets being transferred by the Trustee of Trust A to NewCo, including the Goodwill, will be active assets at the time of the transfer as they are used in the course of carrying on the Business. This requirement will therefore be satisfied. | Detailed Reasoning - Condition 5: both the transferor and each transferee must be residents of Australia (paragraph 328-430(1)(e) of the ITAA 1997): Paragraph 328-430(1)(e) of the ITAA 1997 requires both the transferor and the transferee to meet the residency requirements outlined in section 328-445 of the ITAA 1997. Both Trust A and NewCo are residents of Australia. Consequently, the requirements in paragraph 328-430(1)(e) of the ITAA 1997 will be satisfied. | Detailed Reasoning - Condition 6: both the transferor and transferee must choose to apply the roll-over (paragraph 328-430(1)(f) of the ITAA 1997): Paragraph 328-430(1)(f) of the ITAA 1997 requires that both the transferor and the transferee choose to apply the roll-over under Subdivision 328-G of the ITAA 1997 in relation to the assets transferred under the transaction. The Trustee of Trust A and NewCo will choose to apply the roll-over under Subdivision 328-G of the ITAA 1997 in relation to the assets transferred under the Proposed Restructure such that this requirement is satisfied. | Detailed Reasoning - Conclusion: As the six conditions in section 328-430 of the ITAA 1997 are satisfied, the Proposed Restructure involving the transfer of assets of the Business from the Trustee of Trust A to NewCo will qualify for rollover relief under Subdivision 328-G of the ITAA 1997.

This ruling applies for the following period: