Private ruling: Trust resettlement
Date of advice: 21 March 2022
Published: June 2022
Ruling period: 1 July 20XX to 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the proposed amendments to the Trust Deed cause capital gains tax (CGT) event E1 or E2 in section 104-55 or section 104-60 of the Income Tax Assessment Act 1997 (ITAA 1997) to occur? | A1: No, the proposed amendments to the Trust Deed will not cause CGT event E1 or E2 in section 104-55 or section 104-60 of the ITAA 1997 to occur.

Relevant facts and circumstances: The Trust was established by Trust Deed on X Month 19XX. The Trust Deed provides that; • specified beneficiaries of the Trust in the Schedule are the children of Person A • general beneficiaries of the Trust in the Schedule are Person A and spouse • clause 1 paragraphs (1) to (10) make further provisions about beneficiaries extending the general beneficiaries to include; ­ the specified beneficiaries are general beneficiaries ­ an extensive list of family members (such as; brothers sisters spouses widows widowers children and grandchildren of the beneficiaries and the spouses widows widowers children and grandchildren of brothers and sisters spouses children and grandchildren) ­ eligible corporations, trusts and charities. The proposed Deed of Variation has not yet been executed but is to be made in accordance the Trust Deed which provides powers for the Trustee to make changes including to exclude beneficiaries. The proposed variation is to amend the Trust Deed to; • update the name Person A • remove the children of Person A as the specified beneficiary and replace with the children of Person B • make Person A, as well as any spouse or lineal decedents of Person A all excluded beneficiaries • place limitations on access by beneficiaries to communications and documentation that the Trustee has relied on. There have been prior variations made to the Trust Deed on X Month 19XX, X Month 19XX, X Month 19XX, X Month 20XX and X Month 20XX in relation to; • the ability to allow a mortgage • limit distributions to non-Australian entities or residents • providing for guardian and appointer succession • adding Person C, Person D and Person B to the class of general beneficiaries in the Schedule • updating the definition of net income and how the Trustee deals with the net income.

Relevant legislative provisions: Sections 104-55, 104-60, 149-10, 149-15 and 149-30 of the ITAA 1997. | Sections 160ZZS and 82KXC(1) of the Income Tax Assessment Act 1936 | Section 357-60 of Schedule 1 to the Taxation Administration Act 1953