Private ruling: Income Tax - trust resettlement - CGT event E1 or E2
Date of advice: 3 August 2021
Published: October 2021
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the proposed change of the appointor and the trustee of the Trust cause capital gains tax event E1 or E2 in sections 104-55 and 104-60 of the ITAA 1997, respectively, to happen to the assets of the Trust? | A1: No. It is evident on the facts that that the Appointer has the power to appoint new Appointer and Trustee. The proposed changes will not result in a discontinuation of the trust or create a new trust for trust law purposes. Furthermore, the proposed changes will not lead to a particular asset being subject to a separate charter of rights and obligations such as to give rise to the conclusion that that asset has been settled on terms of a different trust. Therefore, the proposed changes will not trigger a resettlement of the trust or the happening of CGT event E1 pursuant to section 104-55 or CGT event E2 pursuant to section 104-60 of the ITAA 1997.

Relevant facts and circumstances: A Trust was established by a deed of settlement (the Trust Deed) signed on xxx, with person A as the settlor and person B and C as the trustees (the Trustees) for the Trust. The Trust is a discretionary family trust. The Perpetuity Period is 80 years from the date of commencement of the Deed. The Trust Deed provides powers for: • the Appointer the power to nominate new appointer • the Appointer the power to appoint new trustee/s, or remove existing trustee/s. The Appointer of the Trust is person B, and Person C after Person B's death. The Primary Beneficiaries of the Trust is Person B. The Eligible Beneficiaries means the Primary Beneficiary and Associates of the Primary Beneficiary or any one of more of them but exclude the Settlor or any Excluded Beneficiary. The original Appointer Person B passed away. The new Appointer Person C of the Trust proposes to change the appointor and the trustee of the Trust.

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


This ruling applies for the following period: