Private ruling: CGT and trust restructuring
Date of advice: 10 March 2026
Published: 28 April 2026
Ruling period: Year ending 30 June YYYY | Year ending 30 June YYYY

Ruling: Q1: Does the transfer of Trust A from Company A to Company B trigger a Capital Gains Event? | A1: No, where this transfer only involves a change of trustee, then no CGT event will happen. | Q2: If Trust A were transferred to Company B, could its share portfolio be merged with the share portfolio of Trust B without triggering a Capital Gains Event? | A2: No. CGT event E2 would happen.

Relevant facts and circumstances: 1. There are two discretionary trusts that hold portfolios of listed Australian shares and cash. 2. The two trusts are Trust A and Trust B. 3. Company A is the trustee of Trust A. It does not trade or hold assets in its own right and acts only in a trustee capacity. 4. Company B is the trustee of Trust B. It also does not trade or hold assets in its own right and acts only in a trustee capacity. 5. The beneficiaries of both trusts are identical and consist of Person A and Person B and their two children and descendants. 6. Both trusts have Family Trust Elections in place with identical scope, and Person A is the nominated individual for each election. 7. The deed of Trust A permits the appointment of a new trustee. 8. You set out a step to retire Company A as trustee of Trust A and to appoint Company B as the new trustee. No changes will be made to the trust deed, the trust property, or the class of beneficiaries. 9. You consider that appointing Company B as trustee does not alter the beneficial ownership of the trust assets and that the tax outcome for the trust remains the same regardless of which company acts as trustee. 10. You set out a subsequent step under which, following any change of trustee, the assets of Trust A are transferred to Trust B. 11. You intend to wind up Trust A after the asset transfer is completed. 12. You state that, because both trusts have the same beneficiaries and identical Family Trust Elections, the transfer of assets between them will not result in any change in beneficial ownership.

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

Reasons for decision: Summary: No. The mere change of trustee, from Company A to Company B, will not cause a CGT event to happen. | Detailed Reasoning - Detailed reasoning: 13. Section 102-20 provides that you make a capital gain or capital loss if a CGT event occurs. The CGT events are set out in Division 104. 14. The relevant events are those that may be triggered by either a change in trustee or a movement of assets between trusts, namely: CGT event A1 (section 104-10); CGT event E1 (section 104-55); and CGT event E2 (section 104-60). 15. Subsection 104-10(2) provides that CGT event A1 requires a change in ownership, and that no change occurs where legal title passes but beneficial ownership is retained. The note to subsection 104-10(2) confirms that a mere change of trustee does not give rise to CGT event A1. 16. Subsection 104-55(1) provides that CGT event E1 happens if you create a trust over a CGT asset by declaration or settlement. 17. Subsection 104-60(1) provides that CGT event E2 happens if you transfer a CGT asset to an existing trust. 18. The deed of Trust A permits the appointment of a new trustee. Replacing Company A with Company B as trustee under that power results in no change to the trust deed, the trust property or the class of beneficiaries, and the trust continues on the same terms holding the same assets for the same beneficiaries. Only the identity of the trustee changes. 19. As a result, there is no disposal for the purposes of CGT event A1 because beneficial ownership does not change, CGT event E1 is not triggered because no new trust is created, and CGT event E2 is not triggered because no assets are transferred to a different trust. 20. Therefore, the mere replacement of Company A with Company B as trustee of Trust A does not trigger a CGT event. | Detailed Reasoning - Question 2: If Trust A were transferred to Company B, could its share portfolio be merged with the share portfolio of Trust B without triggering a Capital Gains Event? | Summary: No. The transfer of the share portfolio from Trust A to Trust B would cause CGT event E2 to happen. | Detailed Reasoning - Detailed reasoning: 21. Section 104-60 provides that CGT event E2 happens if you transfer a CGT asset to an existing trust. 22. Trust A and Trust B are separate trusts. Having the same trustee, identical beneficiaries, or identical Family Trust Elections does not merge them or cause them to be the same trust. 23. A transfer of assets from one trust to another is a transfer to a different trust for CGT purposes. 24. Each transfer of shares from Trust A to Trust B is treated as a transfer to a different trust, and accordingly CGT event E2 happens. 25. There is no roll-over relief available that disregards capital gains on transfers of investment assets between discretionary trusts solely because the trusts have the same trustee, identical beneficiaries or identical Family Trust Elections. 26. Therefore, the transfer of assets from Trust A to Trust B would trigger a CGT event.

Reasons for decision: All legislative references are to the Income Tax Assessment Act 1997 .