Private ruling: The capital gains tax concessions for small business
Published: February 2015
Ruling period: 1 July 2012 to 30 June 2013 | 1 July 2013 to 30 June 2014
Date scheme commenced: During the income year ended 30 June 2013

Ruling: Q1: In calculating its net income under section 95 of the Income Tax Assessment Act 1936 (ITAA 1936), does Subdivision 152-B of the Income Tax Assessment Act 1997 (ITAA 1997) apply such that the capital gain made by the Trustee of the Trust from the disposal of the Property is disregarded? | A1: Yes | Q2: If the 15 year exemption is available and the disregarded capital gain is distributed by the Trustee to its beneficiaries, the Spouse 1 and Spouse 2, will their portion of this distribution be disregarded under section 152-125 of the ITAA 1997 when working out the taxable income of the Spouse 1 and the Spouse 2? | A2: Yes

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. 1. The Trust was established by a deed in 199X (the Deed). 2. Company A acts in the capacity as Trustee of the Trust. 3. Spouse 1 and Spouse 2 act in the capacity as directors of Company A. 4. Land and buildings (the Property) were purchased by the Trustee in 199Y and the Trustee began operating a business from these premises. 5. Additional construction on the Property was completed by the Trustee in 199Z. 6. Settlement of a matrimonial dispute between the spouses was achieved through the Federal Magistrates Court via Consent Orders that were executed in 20XX (the Matrimonial Settlement). 7. Further alterations were made to the Property by the Trustee in the 20YY income year. 8. The Property was used continuously in the same business of the Trustee from its acquisition in 199Y until its sale under a contract that was entered into in 20ZZ. 9. The Property was not used to derive rental income. 10. A capital gain has arisen from the sale of the Property during the relevant income year. 11. As part of the sale of the Property, Spouse 1 agreed to work for three months for the new owners of the business under contact so that a satisfactory transition could be achieved. Spouse 1's hours and responsibilities were reduced during this three month period. 12. Spouse 1 then moved to their property in the country where they could retire. 13. Funds from the sale of the Property were initially used to pay out a business debt of the Trustee and legal costs. 14. The balance of the sale funds was held in a solicitor's trust account up until the subsequent year when Spouse 1 and Spouse 2 received the bulk of the available funds. 15. The residual funds will eventually be distributed to Spouse 1 and Spouse 2 (upon agreement by their respective legal advisers) in ratios as prescribed under the Matrimonial Settlement less legal and other fees. 16. The Trustee was carrying on a business and its aggregated turnover (as defined in section 328-115 of the ITAA 1997) in the year ended 30 June 20ZZ was greater than $2,000,000. 17. The aggregated turnover of the Trustee in the relevant income year from its business was also greater than $2,000,000. 18. Spouse 2 was presently entitled to X% and Spouse 1 Y% of the net income of the Trustee in the relevant income year. 19. Just before the contract for the sale of the Property was entered into in 20ZZ, the amalgamated value of the net assets of the Trustee, Spouse 1 and Spouse 2 (and any affiliates and connected entities) was less than $6,000,000. 20. The Trustee has not made any distributions of capital to its beneficiaries in the relevant income year or prior years. 21. Since 199Z, Spouse 1 and Spouse 2 were presently entitled to at least 20% of the net income of the Trust in each income year, except in the income year ended 30 June 20XX when the Trustee made a loss. 22. Spouse 1 was over 55 during the relevant income year. Assumption 23. A resettlement of the Trust and CGT event E1 did not happen as a result of the Matrimonial Settlement.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 95, | Income Tax Assessment Act 1997 section 104-10, | Income Tax Assessment Act 1997 Division 152, | Income Tax Assessment Act 1997 subdivision 152-B, | Income Tax Assessment Act 1997 section 152-10, | Income Tax Assessment Act 1997 section 152-15, | Income Tax Assessment Act 1997 section 152-35, | Income Tax Assessment Act 1997 section 152-40, | Income Tax Assessment Act 1997 section 152-55, | Income Tax Assessment Act 1997 section 152-60, | Income Tax Assessment Act 1997 section 152-65, | Income Tax Assessment Act 1997 section 152-70, | Income Tax Assessment Act 1997 section 152-110, and | Income Tax Assessment Act 1997 section 152-125.

Reasons for decision: Summary: 24. The Trustee satisfies the basic conditions for small business CGT relief under subsection 152-10(1) of the ITAA 1997 and the conditions for the small business 15-year exemption under subsection 152-110(1) of the ITAA 1997 and therefore is able to disregard the capital gain arising from the sale of the Property in the relevant income year. | Detailed Reasoning - The capital gains tax concessions for small business: 25. Division 152 of the ITAA 1997 sets out the basic conditions for relief from capital gains for small business entities. The four available concessions are: (1) the 15-year exemption (in Subdivision 152-B of the ITAA 1997); (2) the 50% reduction (in Subdivision 152-C of the ITAA 1997); (3) the retirement concession (in Subdivision 152-D of the ITAA 1997); and (4) the roll-over (in Subdivision 152-E of the ITAA 1997). | Detailed Reasoning - The 15 year exemption: 26. Subsection 152-110(1) of the ITAA 1997 outlines the following conditions that must be satisfied to allow a trustee to disregard a capital gain arising from a CGT event under the 15-year exemption: (a) the basic conditions in Subdivision 152-A of the ITAA 1997 are satisfied for the gain; (b) the entity continuously owned the CGT asset for the 15-year period ending just before the CGT event; (c) the entity had a significant individual for a total of at least 15 years (even if the 15 years was not continuous and it was not always the same significant individual) during which the entity owned the CGT asset; and (d) an individual who was a significant individual of the trust just before the CGT event either: (i) was 55 or over at that time and the event happened in connection with the individual's retirement; or (ii) was permanently incapacitated at that time. 27. It is noted that if the Trustee qualifies for the small business 15–year exemption, the capital gain is entirely disregarded and there is no need to apply any other concession. | Detailed Reasoning - (a) The basic conditions in Subdivision 152-A of the ITAA 1997: 28. Section 152-10 of the ITAA 1997 contains the basic conditions that must be satisfied to be eligible for the small business CGT concessions. These conditions, as set-out in subsection 152-10(1) of the ITAA 1997, are: (a) a CGT event happens in relation to a CGT asset in an income year; (b) the CGT event would have resulted in the gain; (c) at least one of the following applies: (i) you are a small business entity for the income year; (ii) you satisfy the maximum net asset value test in section 152-15 of the ITAA 1997; (iii) you are a partner in a partnership that is a small business entity for the income year and the CGT asset is an asset of the partnership; or (iv) the conditions in subsection 152-10(1A) or 152-10(1B) of the ITAA 1997 are satisfied in relation to the CGT asset in the income year; and (d) the CGT asset satisfies the active asset test in section 152-35 of the ITAA 1997. 29. Section 104-10 of the ITAA 1997 provides that CGT event A1 happens when your ownership of a CGT asset (such as land or buildings) is transferred to another entity. 30. Under a contract entered into in 20ZZ, the Trustee disposed of the Property and made a capital gain. Accordingly, the Trustee satisfies conditions (a) and (b) of the basic conditions. | Detailed Reasoning - Small business entity: 31. To qualify as a small business, an entity needs to satisfy the conditions of section 328-110 of the ITAA 1997. According to subsection 328-110(1) of the ITAA 1997: 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 of 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 $2 million; (ii) your aggregated turnover for the current year in likely to be less than $2 million. 32. The Trustee carried on a business in the relevant year (the current year) and therefore satisfies the requirement in paragraph 328-110(1)(a) of the ITAA 1997. Its aggregated turnover however for the previous year (the year ended 30 June 20ZZ) was greater than $2,000,000. Therefore the condition in subparagraph 328-110(1)(b)(i) of the ITAA 1997 is not met. Similarly, the aggregated turnover of the Trustee for the relevant income year also exceeded $2,000,000 and therefore the condition in subparagraph 328-110(1)(b)(i) of the ITAA 1997 is not satisfied. It is noted that in working out the aggregated turnover of the Trustee for the relevant year, subsection 328-120(5) of the ITAA 1997 contains special rules for calculating the aggregated turnover and annual turnover where a business is only carried on for part of an income year. The Trustee is therefore not a small business entity. | Detailed Reasoning - Maximum net asset value test: 33. An entity satisfies the maximum net asset value test under section 152-15 of the ITAA 1997, if just before the CGT event, the sum of the following amounts does not exceed $6,000,000: (a) the net value of the CGT assets of yours; (b) the net value of the CGT assets of any entities connected with you; (c) the net value of the CGT assets of any affiliates of yours or entities connected with your affiliates (not counting any assets already counted under paragraph (b)). 34. The net value of the CGT asset of an entity, according to subsection 152-20(1) of the ITAA 1997 is the amount (whether positive, negative or nil) obtained by subtracting from the sum of the market values of those assets the sum of: (a) the liabilities of the entity that are related to the assets; and (b) the following provisions made by the entity: (i) provisions for annual leave; (ii) provisions for long service leave; (iii) provisions for unearned leave; (iv) provisions for tax liabilities. 35. In working out the net value of the CGT assets of an entity, certain assets are disregarded (subsection 152-20(2) of the ITAA 1997), including shares, units or other interests (except debts) in another entity that is connected with the first-mentioned entity or with an affiliates of the first-mentioned entity. 36. The net value of the CGT assets owned by the Trustee (and any connected entities and affiliates) does not exceed $6,000,000. Accordingly the maximum net asset value test is satisfied. 37. As the Trustee has met the maximum net asset value test the requirement in paragraph 152-10(1)(c) of the ITAA 1997 is satisfied. | Detailed Reasoning - Active asset test: 38. Subsection 152-35(1) of the ITAA 1997 states that a CGT asset satisfies the active asset test if: (a) you have owned the asset for 15 years or less and the asset was an active asset of yours for a total of at least half of the period of ownership, or (b) you have owned the asset for more than 15 years and the asset was an active asset of yours for a total of at least 7 and a half years. 39. Section 152-40 of the ITAA 1997 provides the meaning of 'active asset'. A CGT asset will be an active asset at a time if, at that time, you own the asset and the asset was used or held ready for use by you, an affiliate of yours, or by another entity that is 'connected with' you, in the course of carrying on a business. 40. In the present case, the asset is a property that was solely used in carrying on the business of the Trustee and is therefore an active asset. 41. The Property was owned by the Trustee for X years (having been purchased in 199Y and disposed of via a contract that was entered into in 20ZZ). The Property was an active asset of the business for the entire time it was owned by the Trustee. The active asset test in subsection 152-35(1) of the ITAA 1997 is therefore satisfied. Satisfaction of the basic conditions in Subdivision 152-A of the ITAA 1997 42. The Trustee therefore satisfies the basic condition in Subdivision 152-A of the ITAA 1997 given that: • CGT event A1 happened in relation to the disposal the Property in the relevant income year; • the CGT event resulted in a capital gain; • the Trustee satisfies the maximum net asset value test; and • the Property satisfies the active asset test. | Detailed Reasoning - (b) The continuous ownership of the CGT asset for 15-years ending just before the CGT event: 43. To be eligible for the 15 year exemption, an entity must have continuously owned the CGT asset for the 15-year period ending just before the CGT event (paragraph 152-110(b) of the ITAA 1997). As previously detailed, the Trustee acquired the Property in 199Y and therefore owned the Property for X years leading up to the CGT event which occurred in 20ZZ when the contract of sale was entered into. Consequently the Trustee satisfies the condition of continuous ownership of the Property for 15-years just before the CGT event. | Detailed Reasoning - (c) The entity had a significant individual for a total of at least 15 years during the period of ownership of the CGT asset: 44. Paragraph 152-110(1)(c) of the ITAA 1997 requires that the entity had a significant individual for a total of at least 15 years (even if the 15 years was not continuous and it was not always the same significant individual) during which the entity owned the CGT asset. 45. An individual, according to section 152-55 of the ITAA 1997, is a significant individual in a trust at a time if, at that time, the individual has a small business participation percentage in the trust of at least 20%. 46. A small business participation percentage includes both a direct and an indirect small business participation percentage (section 152-65 of the ITAA 1997). 47. An individual's direct small business participation percentage in a trust is worked out under either item 2 or item 3 of the table in subsection 152-70(1) of the ITAA 1997 depending on whether beneficiaries have or do not have entitlements to all of the income and capital of the trust. | Detailed Reasoning - Consideration of the Trust Deed: 48. To determine whether beneficiaries have or do not have entitlements to all of the income and capital of the Trust, it is primarily necessary to consider the terms of the Deed. 49. Based on the clauses of the Deed, it is evident that the Trust is a discretionary trust and therefore entities do not have entitlements to all the income and capital of this trust. Therefore, the relevant small business participation percentage is worked out under item 3 as follows: (a) if the trustee makes distributions of income during the income year....the percentage of the distributions to which the entity was beneficially entitled; or (b) if the trustee makes distributions of capital during the current year - the percentage of the distributions to which the entity was beneficially entitled; or, if 2 different percentages are applicable, the smaller. | Detailed Reasoning - Distributions of income: 50. Since 199Z, Spouse 1 and Spouse 2 were each presently entitled to at least 20% of the net income of the Trust in each income year, except in the income year ended 30 June 20XX when the Trustee made a loss and therefore did not make a distribution. Subsections 152-70(4) and 152-70(5) of the ITAA 1997 however stipulate that where a discretionary trust has made a loss and therefore cannot make a distribution, the direct small business participation percentage is taken to accord with that occurring during the income year in which the CGT event occurred. On this basis, the small business participation percentage stemming from the Trustee's income distributions for the income year ended 30 June 20XX will be taken to accord with that of the relevant income year. | Detailed Reasoning - Distributions of capital: 51. If a beneficiary receives both a distribution of income and a distribution of capital in an income year, the small business participation percentage is the lesser of the two. In the current circumstances however the Trustee did not make any distributions of capital prior to the relevant year. As a result the small business participation percentage entitlement will be solely based on the beneficiaries' entitlement to income from the Trust over the relevant period. | Detailed Reasoning - Significant individual: 52. It is evident that, since acquiring the Property in 199Y, both Spouse 1 and Spouse 2 were significant individuals of the Trust for the subsequent 15 years (199Z to 20YY) because they each received distributions of at least 20% of the net income of this trust in each of these years (and therefore had a small business participation percentage of at least 20%). As a result, the requirement in paragraph 152-110(1)(c) of the ITAA 1997 is satisfied. | Detailed Reasoning - Implications of the Matrimonial Settlement: 53. Although, the requirement in paragraph 152-110(1)(c) of the ITAA 1997 is satisfied prior to the Matrimonial Settlement (as the Property has been owned for 15 years and the Trust had a significant individual for this period) it is necessary to consider what impact (if any) the Matrimonial Settlement, that was executed in 20YY, may have had on the Trust and in particular entitlements to its income and capital. This analysis is relevant in fully assessing the application of paragraph 152-110(1)(c) of the ITAA 1997 to the current circumstances and is also applicable in the subsequent analysis. 54. The Federal Magistrates Court has jurisdiction under the Family Law Act 1975 to determine matters in relation to the dissolution of marriage and property settlement disputes. 55. Settlement of a matrimonial dispute between Spouse 1 and Spouse 2 was achieved through the Federal Magistrates Court via Consent Orders that were executed in 20YY. 56. Under the Consent Orders, Spouse 1 and Spouse 2 (in their capacity as directors of the Trustee company) committed to sell all assets of the Trust and then vest and/or wind-up the Trust and distribute the net proceeds in such amounts so that Spouse 1 and Spouse 2 ended up receiving prescribed percentages of the family's total assets (which also included other non-trust assets). 57. In the current circumstances, the Matrimonial Settlement and the associated Consent Orders were issued in accordance with rule 13.04 of the Federal Magistrates Court Rules 2001. This rule allows a Registrar to approve an order that is based on the terms of an agreement reached by the disputing parties. 58. By seeking and obtaining orders in the form sought, it is considered that the controllers of the Trustee (Spouse 1 and Spouse 2) have done no more than to commit the Trustee to act in a particular way in respect of the excise of its discretions that would otherwise have been available under the Deed. 59. It is therefore considered that, even though the Trustee committed itself to exercise its discretions in a certain way under the Matrimonial Settlement, this did not change the nature of the Trust (being a trust where entities do not have entitlements to all the income and capital of the trust). 60. As a consequence, when determining the direct small business participation percentage in the relevant income years, item 3 of the table in subsection 152-70(1) of the ITAA 1997 will still apply such that this percentage is based on the percentage of distributions that each beneficiary was presently entitled to during the relevant year. Therefore, as Spouse 1 and Spouse 2 were entitled to at least 20% of the net income of the Trust in the relevant income years they would also be regarded as significant individuals for these years. | Detailed Reasoning - Significant individual 55 years or over just before the CGT event and the event happened in connection with the significant individual's retirement: 61. The final condition to be satisfied to enable a capital gain to be disregarded by the Trustee under the 15 year exemption is that an individual, who was a significant individual of the trust just before the CGT event, either: (i) was 55 or over at that time and the event happened in connection with the individual's retirement; or (ii) was permanently incapacitated at that time. | Detailed Reasoning - Significant individual 55 years or over just before the CGT event: 62. At the time of the CGT event in 20ZZ, Spouse 1 was a significant individual of the Trust and was over 55 years of age. These features of the final condition are therefore met. | Detailed Reasoning - The event happened in connection with the significant individual's retirement: 63. The second part of this condition requires that the CGT event happened in connection with the significant individual's retirement. 64. There is no definition of 'retirement' in the legislation and so the ordinary meaning of the word must be considered. The Macquarie Dictionary contains a number of definitions of the word 'retirement' one of which includes ' removal or retiring from service, office, or business. ' 65. The Commissioner's view at that time in relation to whether a CGT event happens ' in connection with ' an individual's retirement is found in the Advanced guide to capital gains tax concessions for small business 2012-13, which states that the matter depends on the particular circumstances of each case. 66. The guide further explains that there would need to be at least a significant reduction in the number of hours the individual works or a significant change in the nature of their present activities to be regarded as a retirement. However, it is not necessary for there to be a permanent and everlasting retirement from the workforce. 67. The Advanced guide to capital gains tax concessions for small business 2012-13 also provides a number of examples which help clarify the Commissioner's view on when a CGT event will be considered to be in connection with an individual's retirement. These examples include the following: EXAMPLE A small business operator, over 55 years old, sells his business. Under the terms of the sale, he agrees to be employed by the new owner for a few hours each week for two years. The sale of the business would be in connection with the small business operator's retirement. He has permanently or indefinitely ceased being self–employed and has commenced gainful employment on a much reduced scale with another party, although still performing similar activities. EXAMPLE A small business operator and spouse are both pharmacists, are both over 55 years old and carry on business through two pharmacies. They sell one (and make a capital gain) and, accordingly, reduce their working hours from 60 hours a week each to 45 and 35 hours a week respectively. There has been some change to their present activities in terms of hours worked and location - but there has not been a significant reduction in the number of hours or a significant change in the nature of their activities; therefore, there has been no retirement'. If, on the other hand, one spouse reduced their hours to nil (stopped working), there would be a significant reduction in the number of hours that spouse was engaged in the business activities. Therefore the sale would be in connection with the retirement of that spouse. 68. The Advanced guide to capital gains tax concessions for small business 2012-13 also highlights that ' a CGT event may be 'in connection with your retirement' even if it occurs at some time before retirement . Whether particular cases satisfy the conditions depends very much on the facts of each case '. 69. In the current circumstances, as part of the sale of the Property, Spouse 1 agreed to work for three months for the new owner of the business under contract so that a satisfactory transition could be achieved. Spouse 1's hours and responsibility were substantially reduced during this transition period. Following this transitional period Spouse 1 then moved from the city where the business formerly operated to their country property where they could retire. 70. Taking the above into consideration, it is considered that the CGT event is sufficiently connected with Spouse 1's retirement. | Detailed Reasoning - Small Business 15-year exemption for the Trustee: 71. In summary, based on the above analysis it is considered that the Trustee satisfies all the conditions of the 15-year exemption under section 152-110 of the ITAA 1997. Consequently, it is considered that the capital gain made by the Trustee from the disposal of the Property will be disregarded in calculating its net income under section 95 of the ITAA 1936 for the relevant income year. | Summary: 72. In accordance with section 152-125 of the ITAA 1997, the following amount of the distribution that was made to them in the subsequent year by the Trustee of the disregarded capital gain will not be included in the taxable income of Spouse 1 and Spouse 2: (a) Spouse 1 - 50% of the capital gain; and (b) Spouse 2 - 50% of the capital gain. | Detailed Reasoning - Detailed reasoning: 73. If a capital gain made by a trustee is disregarded under the small business 15-year exemption, any distribution made by the trustee of that exempt amount to a CGT concession stakeholder is not included in the CGT concession stakeholder's assessable income if certain conditions are satisfied. 74. Specifically, the conditions that must be satisfied, which are set-out in subsection 152-125(1) of the ITAA 1997, are: (i) the payment (or payments) must be made to an individual who was a CGT concession stakeholder of the trust just before the CGT event, and (ii) the trustee must make the payment (or payments) within two years after the CGT event that resulted in the capital gain or, in appropriate circumstances, such further time as allowed by the Commissioner. | Detailed Reasoning - Condition (i)- the payment(s) must be made to an individual who was a CGT concession stakeholder of the trust just before the CGT event: 75. The first condition requires that the payment (or payments) must be made to an individual who was a CGT concession stakeholder of the trust just before the CGT event. 76. Section 152-60 of the ITAA 1997 states that an individual is a CGT concession stakeholder of a trust at a time if the individual is: (a) A significant individual in the trust; or (b) a spouse of a significant individual in the trust, if the spouse has a *small business participation percentage in the trust at that time that is greater than zero. As detailed above, in the current circumstances, it is considered that, just before the CGT event happened in 20ZZ both Spouse 1 and Spouse 2 were significant individuals and therefore CGT concession stakeholders of the Trust. | Detailed Reasoning - Condition (ii)- the trust must make the payment(s) within two years after the CGT event that resulted in the capital gain: 77. The relevant CGT event (A1) in these circumstances happened in 20ZZ when the Trustee entered into the contract to sell the Property. 78. Therefore to meet this condition, the Trustee must have made the relevant payment or payments to the CGT concession stakeholders by the subsequent year. 79. Payments to Spouse 1 and Spouse 2 were made in the subsequent year by the Trustee. These payments were made within the requisite two year time limit and therefore satisfy the second condition. | Detailed Reasoning - Limit on payments that can be disregarded: 80. Subsection 152-125(2) of the ITAA 1997 imposes a limit on the total amount of payments made to each CGT concession stakeholder that can be disregarded in working out the CGT concession stakeholder's taxable income. This limit is worked out by multiplying the CGT concession stakeholder's participation percentage by the exempt amount. 81. In applying this formula, the CGT concession stakeholder's participation percentage in a trust is either: (a) for a trust where entities have entitlements to all the income or capital of the trust- the stakeholder's small business participation percentage in the trust just before the CGT event, or (b) for a trust where entities do not have entitlements to all the income or capital of the trust- the amount, expressed as a percentage, worked out using the formula: 100 (number of CGT concession stakeholders of the trust just before the CGT event) 82. As detailed above, in the current circumstances, it is considered that the Trust is a trust where entities do not have entitlements to all the income and capital of the trust. A CGT concession stakeholder's participation percentage in the Trust will therefore be calculated by dividing 100 by the number of CGT concession stakeholders of the Trust just before the CGT event. 83. In this case, both Spouse 1 and Spouse 2 were CGT concession stakeholders just before the CGT event and therefore their stakeholder's participation percentage will be 50% (100/2). 84. The amount of the payment that may be disregarded under section 152-125 of the ITAA 1997 by Spouse 1 and Spouse 2 in respect of their distribution from the Trustee of the exempt amount is therefore as follows: (a) Spouse 1 - 50% of the capital gain; and (b) Spouse 2 - 50% of the capital gain. | Detailed Reasoning - Distribution in 2014: 1. For completeness, it is noted that the amount of the distribution that both Spouse 1 and Spouse 2 received from the Trustee in the subsequent year exceeded the amount that is excluded from their taxable income under section 152-125 of the ITAA 1997. 2. In light of this, it is relevant to note that the tax treatment of that portion of the distribution in the subsequent year that Spouse 1 and Spouse 2 received from the Trustee that exceeded the excluded amount will depend on what this part of the distribution is referrable to. If, for example, some or all of this distribution is a return of capital or a repayment of principal amounts that Spouse 1 and Spouse 2 previously loaned to the Trustee then such amounts will also not constitute taxable income of either Spouse 1 and Spouse 2.

The advice in the Register has been edited and may not contain all the factual details relevant to each decision. Do not use the Register to predict ATO policy or decisions.