Private ruling: Trust resettlement
Date of advice: 21 May 2019
Published: July 2019
Ruling period: Financial year ending 30 June 2019
Date scheme commenced: 1 July 2018

Ruling: Q1: Does CGT event E1 in section 104-55 of the Income Tax Assessment Act 1997 (ITAA 1997) happen upon the execution of the proposed amendment? | A1: No. The variation of the Deed is a valid exercise of the Trustees powers and the change will not cause the existing trust to terminate; nor will it lead to a particular asset being settled on terms of a different trust. It is considered that the variation will not result in a change of ownership of any of the trust assets. As such, the variation of the Deed will not cause CGT event E1 to happen. | Q2: Does CGT event E2 in section 104-60 of the ITAA 1997 happen upon the execution of the proposed amendment? | A2: No. The variation of the Deed is a valid exercise of the Trustees powers and the change will not cause the existing trust to terminate; nor will it lead to a particular asset being settled on terms of a different trust. In addition, the variation will not result in a change of ownership of any of the trust assets. As such, the variation of the Deed will not cause CGT event E2 to happen.

Relevant facts and circumstances: The Family Trust (the trust) was established a number of years ago. The trustee is a company incorporated in Australia. The trustee intends to execute a Deed of Amendment to vary the terms of the Deed prior to the end of the financial year. The variation is allowed by the terms of the trust deed. The variation will extend the vest date of the trust.

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