Private ruling: Express trust: Capital Gains Tax
Published: December 2013
Ruling period: 1 July 2013 to 30 June 2014
Date scheme commenced: 20 May 2002

Ruling: Q1: Are you assessable for the entire capital gain made on the disposal of the property? | A1: No.

Relevant facts and circumstances: You were the owner of the property which was being held in an Express trust with yourself and your siblings as beneficiaries The property was sold and settled recently. The Express trust deed sets out proportions for the distribution of the proceeds of the sale of the property.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 95 | Income Tax Assessment Act 1936 section 96 | Income Tax Assessment Act 1936 section 97 | Income Tax Assessment Act 1997 section 104-10

Reasons for decision: Summary: The proceeds of sale and any capital gains for the sale of the property held in trust are to be distributed in accordance with the proportions allocated in the trust deed. | Detailed Reasoning - Detailed reasoning: The trust deed that has been supplied by you in correspondence is an Express trust. An express trust is one intentionally created by the owner of property in order to confer a benefit upon another. It is created by express declaration, which can be effected by some agreement or common intention held by the parties to the trust. For an express trust to be created it is necessary that there is certainty of the intention to create a trust, certainty of the subject matter of the trust and certainty as to the object of the trust. While trusts can be created orally, all State Property Law Acts contain provisions derived from the Statute of Frauds that preclude the creation or transfer of interests in land except if evidenced in writing. Therefore Express trusts must be evidenced in writing. In your circumstances a trust deed was established between you and your siblings. Therefore, there is written evidence that you were holding the property as trustee on behalf of the beneficiaries, yourself and your siblings up until the time that the property was sold. As you held the legal title in the property in accordance with the trust deed you are only assessable on your share of the net capital gain made on the disposal of the property.