Private ruling: CGT -small business restructure
Date of advice: 1 June 2026
Published: 17 August 2026
Ruling period: Year ending 30 June 20YY | Year ending 30 June 20YY
Date scheme commenced: 1 July 20YY

Ruling: Q1: Will the proposed transfer of Property 1 to the New Trust qualify for relief under Subdivision 328-G of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. | Q2: Will the proposed transfer of Property 2 to Existing Trust A qualify for relief under Subdivision 328-G of the ITAA 1997? | A2: Yes. | Q3: Will the proposed transfer of Property 3 to Existing Trust B qualify for relief under Subdivision 328-G of the ITAA 1997? | A3: Yes.

Relevant facts and circumstances: You do not carry on any business in your individual capacity. You own Property 1, Property 2 and Property 3 (collectively 'the Land') The Land has been used in a business since date of purchase. The Land is currently used in a business carried on by a trading trust. Prior to this the business operated through a partnership in which you were a controlling partner. The trading trust has a corporate trustee which was established at the same time as the trading trust. You are the appointor of the trading trust. You are the director and shareholder of the corporate trustee of the trading trust. The business carried on by the trading trust is solely for the benefit of you and your family. You and your family are beneficiaries of the trading trust. The trading trust is financially dependent on the Land, and you are financially dependent on the trading trust and act in concert to ensure that the trading trust is run in such a way as to meet financial requirements. There is additional land held by other trusts controlled by you that is used by the trading trust in its business. There is no formal lease in place between you and the trading trust in respect to the use of the Land due to the close intertwined relationship between you and the trading trust. The trading trust had aggregated turnover of less than $10million in the year ended 30 June 20YY and this will also be the case in the years ended 30 June 20YY and 30 June 20YY. Proposed restructure facts You are proposing to undertake the following transactions: 1. transferring your ownership of Property 1 to New Trust 2. transferring your ownership of Property 2 to Existing Trust A, and 3. transferring your ownership of Property 3 to Existing Trust B. Your purpose for undertaking the restructure is to: • improve long-term risk management by separating high-value assets (the Land) from operational trading risk and director liability risk, particularly given the scale of operations and exposure to seasonal, commodity price and financing volatility • facilitate more flexible and commercially efficient funding structures by allowing land to be held in a separate continuing entity capable of granting security independently of trading operations and directors • to standardise land ownership structures across the family group, whilst improving governance clarity, and ensure consistent risk management across all landholdings. Proposed transfer of Property 1 New Trust will be a discretionary trust with a corporate trustee. New Trust will have a FTE in place for the purposes of Schedule 2F of the Income Tax Assessment Act 1936 (ITAA 1936) with you listed as the specified individual in the year Property 2 is transferred. You will be the appointor of the New Trust. You will be the primary beneficiary of the New Trust. You will be the director of the corporate trustee of the New Trust. You will be the secretary and shareholder of the corporate trustee. You and your family will be the beneficiaries of the New Trust. You are an Australian resident for tax purposes, and the New Trust will be a resident trust. Property 1 will continue to be used by the trading trust in the carrying on of its business activities after the transfer. Both you (as transferor) and the New Trust (as transferee) will choose to apply the roll-over in relation to the transfer of Property1 transferred to the New Trust. If Property 1 was to be purchased now it would be purchased in the proposed format of a discretionary trust rather than by you individually. Neither you or the New Trust are, or will be, an exempt entity or a complying superannuation entity. Proposed transfer of Property 2 You are the appointor of Existing Trust A. The primary beneficiaries of Existing Trust A are you and another individual. Existing Trust A is a discretionary trust and has a corporate trustee. You are the director, secretary and shareholder of the corporate trustee. You and your family members are the beneficiaries of Existing Trust A. Existing Trust A is a resident trust. Existing Trust A will have a FTE in place for the purposes of Schedule 2F of the ITAA 1936 with you listed as the specified individual in the year Property 2 is transferred. Property 2 will continue to be used by the trading trust in the carrying on of its business activities after the transfer. Both you (as transferor) and Existing Trust A (as transferee) will choose to apply the roll-over in relation to the transfer of Property 2 to Existing Trust A. If Property 2 was to be purchased now it would be purchased in the proposed format of a discretionary trust rather than by you individually. Neither you or Existing Trust A are, or will be, an exempt entity or a complying superannuation entity. Proposed transfer of Property 3 You are the appointor of Existing Trust B. The primary beneficiaries of Existing Trust B are you and a family member. Existing Trust B is a discretionary trust and has a corporate trustee. You are the director, secretary and shareholder of the corporate trustee. You and your family members are the beneficiaries of Existing Trust B. Existing Trust B is a resident trust. Existing Trust B will have a FTE in place for the purposes of Schedule 2F of the ITAA 1936 with you listed as the specified individual in the year Property 3 is transferred. Property 3 will continue to be used by the trading trust in the carrying on of its business activities after the transfer. Both you (as transferor) and Existing Trust B (as transferee) will choose to apply the roll-over in relation to the transfer of Property 3 to Existing Trust B. If Property 3 was to be purchased now it would be purchased in the proposed format of a discretionary trust rather than by you individually. Neither you or Existing Trust B are, or will be, an exempt entity or a complying superannuation entity.

Relevant legislative provisions: Income Tax Assessment Act 1936 Schedule 2F | Income Tax Assessment Act 1997 section 328-110 | Income Tax Assessment Act 1997 Subdivision 328-G | Income Tax Assessment Act 1997 section 328-430 | Income Tax Assessment Act 1997 subsection 328-430(1) | Income Tax Assessment Act 1997 subsection 328-430(2) | Income Tax Assessment Act 1997 section 328-440

Reasons for decision: Summary: You satisfy all the requirements for the small business restructure roll-over. As such, you qualify for relief under the roll-over and can disregard the gains arising from the transfer of the Land to the New Trust, Existing Trust A and Existing Trust B. | Detailed Reasoning - Detailed reasoning: Subdivision 328-G of the ITAA 1997 provides an optional roll-over for gains and losses arising from the transfer of CGT assets, trading stock, revenue assets and depreciating assets as part of a genuine restructure of a small business. Section 328-430 sets out the requirements for the roll-over to be available. Subsection 328-430(1) of the ITAA 1997 provides that a roll-over is available in relation to an asset that, under a transaction, an entity (the transferor) transfers to one or more other entities (transferees) if: (a) the transaction is, or is a part of, a genuine restructure of an ongoing business, and (b) each party to the transfer is an entity to which any one or more of the following applies: (i) it is a small business entity for the income year during which the transfer occurred (ii) it has an affiliate that is a small business entity for that income year (iii) it is connected with an entity that is a small business entity for that income year (iv) it is a partner in a partnership that is a small business entity for that income year and (c) the transaction does not have the effect of materially changing: (i) which individual has, or which individuals have, the ultimate economic ownership of the asset, and (ii) if there is more than one such individual - each such individual's share of that ultimate economic ownership, and (d) the asset is a CGT asset (other than a depreciating asset) that is, at the time the transfer takes effect: (i) if subparagraph (b)(i) applies - an active asset, or (ii) if subparagraph (b)(ii) or (iii) applies - an active asset in relation to which subsection 152-10(1A) of the ITAA 1997 is satisfied in that income year, or would be satisfied in that income year if paragraph 152-10(1AA)(b) of the ITAA 1997 were disregarded; or (iii) if subparagraph (b)(iv) applies - an active asset and an interest in an asset of the partnership referred to in that subparagraph, and (e) the transferor and each transferee meet the residency requirement in section 328-445 of the ITAA 1997 for an entity, and (f) the transferor and each transferee choose to apply a roll-over under Subdivision 328-G of the ITAA 1997 in relation to the assets transferred under the transaction. However, a roll-over under this Subdivision is not available if the transferor, or any transferee, is either an exempt entity or a complying superannuation entity (subsection 328-430(2) of the ITAA 1997). | Detailed Reasoning - Ultimate economic ownership - discretionary trusts (alternative test): In most cases the nature of a discretionary trust (particularly where there are multiple beneficiaries) will mean that it is not possible to determine the ultimate economic owner of its assets before or after they have been transferred and thereby to show that the ultimate economic ownership has not been materially changed. As such, a transfer of assets from or to a discretionary trust will generally not meet the requirements for ultimate economic ownership in paragraph 328-430(1)(c) of the ITAA 1997. Where it is not possible to demonstrate that ultimate economic ownership of the assets has been maintained, an alternative ultimate economic ownership test is available to discretionary trusts. Section 328-440 of the ITAA 1997 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 provides: 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 took effect, the asset was included in the property of a non-fixed trust that was 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. 'Family group' is defined in section 272-90 of the ITAA 1936 with reference to the individual specified in a FTE. Section 328-440 of the ITAA 1997 is satisfied if the assets are included in the property of a family trust (as defined in Schedule 2F to the ITAA 1936) either just before or just after the transaction took effect. Additionally, every individual who had the ultimate economic ownership of the asset just before and just after the transfer must be members of the family group (as defined in by Schedule 2F to the ITAA 1936) relating to the family trust. Law Companion Ruling LCR 2016/3 Small Business Restructure Roll-over: genuine restructure of an ongoing business and related matters at paragraph 108 - 109 describes that the alternative ultimate economic ownership test provides additional flexibility to small family businesses carried on through non-fixed trusts by allowing them to meet the requirement to maintain proportionate ultimate economic ownership of the transferred assets if the ultimate economic ownership of those assets remains within the family. The alternative test is only available when assets are included in the property of a non-fixed trust that is a family trust, that is, a non-fixed trust for which there is an FTE in force. | Detailed Reasoning - Small business entity: You are a small business entity for an income year (the current 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 $10million, (ii) your aggregated turnover for the current year is likely to be less than $10million (subsection 328-110(1) of the ITAA 1997). However, you are not a small business entity for an income year (the current year) because of subparagraph 328-130(1)(b)(ii) of the ITAA 1997 if: (a) you carried on a business in each of the 2 income years before the current year, and (b) your aggregated turnover for each of those income years was $10million or more (subsection 328-110(3) of the ITAA 1997). | Detailed Reasoning - Application to your circumstances: You satisfy the requirements for the small business restructure roll-over because: • the transfer of the Land from you to the New Trust, Existing Trust A and Existing Trust B provides asset protection benefits and results in a structure that would be adopted if the Land was to be purchased now and is considered, or is considered a part of, a genuine restructure of an ongoing business • you, the New Trust, Existing Trust A and Existing Trust B will be affiliated with or connected to a small business entity in the income year the Land is transferred as the trading trust had aggregated turnover of less than $10million in the year ended 30 June 2025 and will have in the years ended 30 June 2026 and 30 June 2027 • the transfer will not have the effect of materially changing the ultimate economic ownership of the Land as just after the transfer the Land will be included in the property of a non-fixed trust that is a family trust with you listed as the specified individual, and all the individuals who had ultimate economic ownership of the Land both before and after the transfer will be members of your family group • at the time the transfers take effect the Land will be an active asset in relation to which subsection • 152-10(1A) of the ITAA 1997 will be satisfied in that income year, or would be satisfied in that income year if paragraph 152-10(1AA)(b) of the ITAA 1997 were disregarded • you are an Australian resident for tax purposes, and the New Trust, existing Trust A and existing Trust B will be resident trusts • you and the New Trust, existing Trust A and existing Trust B will choose to apply the roll-over in relation to the transfer, and • neither party to the transfers is, or will be, an exempt entity or a complying superannuation entity. As such, you qualify for relief under Subdivision 328-G of the ITAA 1997 in relation to the transfer of the Land to the New Trust, Existing Trust A and Existing Trust B and can disregard the gains arising from the transfers.

Does IVA apply to this private ruling?: Part IVA of the ITAA 1936 contains anti-avoidance rules that can apply in certain circumstances where you or another taxpayer obtains a tax benefit, imputation benefit or diverted profits tax benefit in connection with an arrangement. | If Part IVA applies, the tax benefit or imputation benefit can be cancelled (for example, by disallowing a deduction that was otherwise allowable) or you or another taxpayer could be liable to the diverted profits tax. | We have not fully considered the application of Part IVA to the arrangement you asked us to rule on, or to an associated or wider arrangement of which that arrangement is part. | If you want us to rule on whether Part IVA applies, we will need to obtain and consider all the facts about the arrangement which are relevant to determining whether Part IVA may apply. | For more information on Part IVA, go to our website ato.gov.au/gaar .