Private ruling: Trust amendment
Published: August 2012
Ruling period: Year Ending 30 June 2012 | Year Ending 30 June 2013 | Year Ending 30 June 2014 | Year Ending 30 June 2015
Date scheme commenced: 01 July 2011

Ruling: Q1: Will an amendment to the Trust Deed to add an amendment clause to the trust trigger CGT event E1 in relation to the Trust's CGT assets? | A1: No | Q2: Will a change to the vesting date of the Trust trigger CGT Event E1 in relation to the Trust's CGT Assets? | A2: No

Relevant facts and circumstances: You propose to amend the trust deed. The amendment will be made pursuant to an existing power.

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

Reasons for decision: Summary: CGT event E1 in section 104-55 of the Income Tax Assessment Act 1997 (ITAA 1997) happens when a trust is resettled, that is, when one trust estate has ended and another has replaced it. The effect of such a resettlement is that a disposal of the trust assets is deemed to occur and consequently, a capital gain may arise to the trustee or beneficiaries of the trust. Draft Tax Determination TD 2012/D4 sets out the Commissioner's view in respect to trust resettlements and whether or not a resettlement has occurred. A valid amendment to a trust will not result in the termination of a trust providing: · the amendment is made pursuant to an existing power · the amendment does not cause the trust to terminate for trust law purposes · the effect of the amendment does 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. In your case it is accepted the above requirements are met and CGT event E1 will not occur in respect of the proposed amendments.

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