Private ruling: Scrip for scrip rollover
Published: August 2014
Ruling period: income year ended 30 June 20xx
Date scheme commenced: income year ended 30 June 20xx

Ruling: Q1: Will rollover be available under Subdivision 124-M of the Income Tax Assessment Act 1997 (ITAA 1997) in respect of unitholder exchanging its units in Trust 1 for units in Trust 2? | A1: Yes | Q2: Will CGT event E1 in section 104-55 of the ITAA 1997 happen if the terms of Trust 1 are amended pursuant to a valid exercise of a power contained within the Trust Deed? | A2: No

Relevant facts and circumstances: The sole unitholder of Trust 1 applied for a private ruling in connection with a corporate group restructure under which a new unit trust (Trust 2) will be interposed between the unitholder and Trust 1. Prior to the interposition, the Trust 1 deed will be amended in certain respects pursuant to a valid exercise of a power contained within the Trust Deed.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-55 Subdivision 124-M

Reasons for decision: Summary: Scrip for scrip rollover under Subdivision 124-M will be available in respect of unitholder exchanging its Trust 1 for units in Trust 2 as the conditions under Subdivision 124-M will be met. In particular, for the purposes of the Subdivision 124-M, both Trust 1 and the Trust 2 are considered to be 'fixed trusts' because if the beneficiary of both trusts does not have a vested and indefeasible interest to all the income and capital of the trust, it will be treated as having a vested and indefeasible interest to the income and capital of the trust pursuant to subsection 272-5(3) of Schedule 2F to the Income Tax Assessment Act 1936 . The amendments proposed to be made to the Trust 1 Deed will not result in CGT event E1 happening under subsection 104-55(1) i.e. they will not result in a "resettlement" of the trust.