Private ruling: Capital Gains Tax - absolute entitlement
Date of advice: 10 June 2019
Published: August 2019
Ruling period: Financial year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the transfer of the property held on Trust under the deed of agreement to the beneficiary upon the vesting of the trust result in a capital gains tax (CGT) event? | A1: No. A beneficiary that is absolutely entitled to a CGT asset as against the trustee will be the relevant taxpayer if a CGT event happens to the asset. This is the effect of section 106-50 of the ITAA 1997 which provides that an act done by a trustee in relation to an asset is taken to have been done by a beneficiary that is absolutely entitled to the asset. As the beneficiary was absolutely entitled against the trustee to the assets of the trust, no CGT event will occur when the trust vests and subsequently transfers the asset to the beneficiary.

Relevant facts and circumstances: The trust acquired a property after September 1985 which it held for the benefit of a beneficiary. The trust vested in the 20XX financial year and the property was transferred to the beneficiary.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 section 104-55 | Income Tax Assessment Act 1997 section 104-60