Private ruling: - exemptions
Date of advice: 13 June 2023
Published: 7 August 2023
Ruling period: Income year ending 30 June 2023

Ruling: Q1: For the purposes of paragraph 149-10(a) of the Income Tax Assessment Act 1997 (ITAA 1997), should the Property be considered to have been last acquired by the Company before 20 September 1985? | A1: Yes. | Q2: For the purposes of paragraphs 149-10(b) and (c) of the ITAA 1997, should the Company be taken to have acquired the Property on or after 20 September 1985? | A2: No. | Q3: Is any capital gain made by the Company on the disposal of the Property disregarded pursuant to paragraph 104-10(5)(a) of the ITAA 1997? | A3: Yes.

Relevant facts and circumstances: Background The Company incorporated before 1985 and is in the business of providing new and used equipment, parts and services across several local and regional branches. The Property The Property is land situated in Australia and acquired by the Company before 20 September 1985. During the 2023 income year, the Company sold the Property to an unrelated party. Ownership of the Company Company J has directly owned 100% of the shares in the Company from its incorporation. Company J itself was incorporated before 20 September 1985. Ownership of Company J since 20 September 1985 The below table identifies Company J's ownership structure since immediately before 20 September 1985 to date. Table 1: Company's J ownership structure since immediately before 20 September 1985 to date Class/number of shares Income rights Capital rights Ownership 100 A Class ordinary No limitations. Directors can pay dividends to each class of ordinary shares to exclusion of other. No limitations At all times owned by Company X which in turn has been wholly owned at all times by Trust D 900 B Class ordinary No limitations. Directors can pay dividends to each class of ordinary shares to exclusion of other. No limitations • 19 September 1985 to November 1985 - owned by Company S, which was in turn wholly owned by Family Trust A. • November 1985 to April 2001 - owned by Company S, which was in turn wholly owned by Trust V. • April 2001 - all B Class ordinary shares cancelled. 9,000 non-cumulative preference $630 of dividends per annum $9,000 return of capital At all times owned by Trust W. 10 D Class preference None $10 return of capital • Issued in December 2016 to Taxpayer A. • Passed to Taxpayer C1 upon the death of Taxpayer A. Pursuant to Company J's Articles of Association, the A and B Class ordinary shares are ranked equally in all respects and for all purposes provided that dividends may be declared on one of such classes of shares to the exclusion of the other of those classes or may be declared at a different rate on one of such classes of shares from the rate declared on the other of those classes of shares. The non-cumulative preference shares issued in Company J confer rights to: • capital totalling the paid up amount (being $9,000); and • income in the form of a non-cumulative preference dividend of 7% per annum on the paid-up amount of the shares, totalling $630 per annum. The D Class preference shares do not provide any interest in the income of Company J, as they are not entitled to dividends, and merely confer a right to receive the amount of capital paid up for their issue, being $10. This class of shares exist to provide the holder with voting power over certain key aspects of Company J decision making, particularly decisions relating to matters concerning the Company, to Taxpayer C1 who controls the business. Trust D and Trust W Trust D is a family trust settled via Deed of Settlement before 1985 for the benefit of Taxpayer A, his spouse (Taxpayer B) and their four children, Taxpayer C1, Taxpayer C2, Taxpayer C3 and Taxpayer C4. Trust W is also a family trust settled via Deed of Settlement before 1985 for the benefit of Taxpayer A, Taxpayer B, Taxpayer C1, Taxpayer C2, Taxpayer C3 and Taxpayer C4. The trustee of Trust D and Trust W has always been Company T. Since incorporation, the shareholders of Company T have exclusively consisted of members of Taxpayer A's family. The current shareholders are Taxpayer C1, Taxpayer C2, Taxpayer C3 and Taxpayer C4. The original Appointor of Trust D and Trust W was Taxpayer A. Upon his passing, Taxpayer B became the appointor and continues to hold that office. 'Beneficiary' is defined in the Deeds to Trust D and Trust W to mean an Income Beneficiary, a Default Income Beneficiary or a Capital Beneficiary. At all times since before 1985, the Income Beneficiaries of Trust D and Trust W have been defined as: • Taxpayer A; • Taxpayer B; • any child or children or remoter issue of Taxpayer A (with the exception of children from Taxpayer A's previous marriage, and any of their children or remoter issue); • any spouse for the time being of any child, or remoter issue of Taxpayer A (with the exception of children from Taxpayer A's previous marriage, and any of their children or remoter issue) and the widow or widower of any such child, or remoter issue; • a company in respect of a share in which an Income Beneficiary hereinbefore described is a shareholder; and • the trustee or trustees for the time being of any settlement or trust whereunder any one or more of the Income Beneficiaries hereinbefore described (with the exception of any company referred to in the preceding paragraph) has any interest whatsoever in the capital or income thereof. At all times since before 1985, the Default Income Beneficiaries of Trust D and Trust W have been defined as: • any child or children or remoter issue of Taxpayer A (with the exception of children from Taxpayer A's previous marriage, and any of their children or remoter issue); • Taxpayer B; • Taxpayer A; • any spouse for the time being of any child, or remoter issue of Taxpayer A (with the exception of children from previous marriage, and any of their children or remoter issue) and the widow or widower of any such child, or remoter issue; and • any child or children or remoter issue of Taxpayer H. At all times since inception, the Capital Beneficiaries of Trust D and Trust W have been defined as the children of Taxpayer A and Taxpayer B, and any of their children or remoter issue. Clause 2 of the Deeds deals with the distribution of the net income of Trust D and Trust W and provides: The Trustees may from time to time during the year of income pay or apply the whole or any part of the income to or for the benefit of such of the Income Beneficiaries or to or for the benefit of such one or more thereof to the exclusion of the other or others thereof who shall be living or in existence (as the case may be) at any time during the year of income and in such shares and proportions as the Trustees in their absolute discretion may from time to time during the year of income determine. Should the Trustees not make any effective determination ... in respect of the whole or any part of the income of a year of income on or before the last day of that year of income, then the Trustees shall hold so much of the income of the year of income as shall not have been the subject of an effective determination by the Trustees as aforesaid (the "unappropriated income") UPON TRUST absolutely for such of the Default Income Beneficiaries ... Before his passing, Taxpayer A was concerned to: • retain ownership and control of Company J within his immediate family (meaning Taxpayer A and Taxpayer B and the children of their marriage); and • preserve and enhance the Company's business and its related assets for the benefit of his family. In 2016, a Shareholder and Beneficiary Deed, as amended in 2017, was entered into, the broad effect of which was to: Company S All of the issued shares in Company S were originally held by Family Trust A which was settled for the benefit of Taxpayer A, Taxpayer B and their four children. In November 1985, all of the issued shares in Company S were transferred to Trust V, also a discretionary trust settled for the benefit of Taxpayer A, Taxpayer B and their four children. As part of a simplification of the family ownership structure of Company J, the 900 B Class shares held by Company S in Company J since immediately before 20 September 1985 were cancelled in April 2001, and Company S was wound up. Summary of distributions paid by Company J Since immediately before 20 September 1985, Company J has only paid dividends to Company X on the A Class ordinary shares and to Trust W (totalling $630 per annum) on the non-cumulative preference shares. Company J has never paid any dividends on the B Class ordinary shares, nor has it been capable of paying any dividends on the D Class preference shares. Company X has only ever paid dividends to Trust D, as it has been wholly owned by Trust D at all times. The following table summarises all distributions made by Trust D since immediately before 20 September 1985. Table 2: All distributions made by Trust D since immediately before 20 September 1985 Beneficiary Distribution received ($) % of total Relationship Taxpayer B XXX 4.50 Family member Taxpayer A XXX 29.7 Family member Taxpayer C1 XXX 0.6 Family member Taxpayer C2 XXX 0.3 Family member Taxpayer C3 XXX 0.3 Family member Taxpayer C4 XXX 0.3 Family member Trust K XXX 2.9 Taxpayer C1's trust Trust L XXX 0.8 Taxpayer C2's trust Company M XXX 15.70 Taxpayer C3's company Company N XXX 15.40 Taxpayer C2's company No beneficiary entitled -amounts held on trust XXX 15.70 Company P XXX 13.80 Taxpayer C1's company Total XXXX 100.00 Based on the distributions of Trust D since immediately before 20 September 1985 (as set out in the above table) and the tracing of trust distributions to ultimate beneficiaries (through Trust K, Trust L, Company M, Company N and Company P), it can be concluded that Trust D only distributed to Taxpayer A's family or entities that were legally or beneficially owned by members of that family, and where the beneficiary was the trustee of another trust, the trust was controlled by members of Taxpayer A's family and distributions from such trusts were ultimately received by members of that family. No beneficiary of Trust W has been made presently entitled to the income of Trust W in any of the 2011 to 2021 income years, except for Taxpayer A in 2017.

Relevant legislative provisions: Income Tax Assessment Act 1936 former subsection 160ZZRR(1) | Income Tax Assessment Act 1936 former section 160ZZS | Income Tax Assessment Act 1936 former subsection 160ZZS(1) | Income Tax Assessment Act 1936 former Subdivision C of Division 20 of Part IIIA | Income Tax Assessment Act 1997 paragraph 104-10(5)(a) | Income Tax Assessment Act 1997 Division 149 | Income Tax Assessment Act 1997 section 149-10 | Income Tax Assessment Act 1997 paragraph 149-10(a) | Income Tax Assessment Act 1997 paragraph 149-10(b) | Income Tax Assessment Act 1997 paragraph 149-10(c) | Income Tax Assessment Act 1997 subsection 149-15(1) | Income Tax Assessment Act 1997 subsection 149-15(2) | Income Tax Assessment Act 1997 subsection 149-15(3) | Income Tax Assessment Act 1997 subsection 149-15(4) | Income Tax Assessment Act 1997 subsection 149-15(5) | Income Tax Assessment Act 1997 Subdivision 149-B | Income Tax Assessment Act 1997 subsection 149-30(1) | Income Tax Assessment Act 1997 subsection 149-30(2) | Income Tax Assessment Act 1997 subsection 149-50(1) | Taxation Administration Act 1953 section 357-85 of Schedule 1

Reasons for decision: Summary: All subsequent legislative references are to the ITAA 1997, unless otherwise specified. | Summary: The Property was last acquired by the Company before 20 September 1985 and has not stopped being a pre-CGT asset of the Company because of former subsection 160ZZS(1) of the ITAA 1936 or Division 149. | Detailed Reasoning - Detailed reasoning: Division 149 contains rules, applicable to the 1999 and later income years, which govern when an asset acquired before 20 September 1985 stops being a 'pre-CGT asset'. Section 149-10 provides: A CGT asset that an entity owns is a pre-CGT asset if, and only if: (a) the entity last acquired the asset before 20 September 1985; and (b) the entity was not, immediately before the start of the 1998-99 income year, taken under: (i) former subsection 160ZZS(1) of the Income Tax Assessment Act 1936 ; or (ii) Subdivision C of Division 20 of former Part IIIA of that Act; to have acquired the asset on or after 20 September 1985; and (c) the asset has not stopped being a pre-CGT asset of the entity because of this Division. | Detailed Reasoning - Former subsection 160ZZS(1) of the ITAA 1936: Former subsection 160ZZS(1) of the ITAA 1936 contains the rules for non-public entities to determine if an asset is a pre-CGT asset. A public entity was defined under former subsection 160ZZRR(1) of the ITAA 1936 as a public company, mutual insurance organisation or publicly traded unit trust. A 'public company' was defined under subsection 160ZZRR(1) as: (a) a listed public company; or (b) a company (other than a listed public company) all the shares in which are beneficially owned by any one or more of the following: (i) listed public companies; (ii) mutual insurance organisations; (iii) publicly traded unit trusts; or (c) a 100% subsidiary of a company to which paragraph (b) applies. The Company is not a 'public entity' as defined in former subsection 160ZZRR(1) of the ITAA 1936 since it is not a publicly company. Former subsection 160ZZS(1) of the ITAA 1936 states: For the purposes of the application of this Part in relation to a taxpayer, an asset acquired by the taxpayer on or before 19 September 1985 shall be deemed to have been acquired by the taxpayer after that date unless the Commissioner is satisfied, or considers it reasonable to assume, that, at all times after that date when the asset was held by the taxpayer, majority underlying interests in the asset were held by natural persons who, immediately before 20 September 1985, held majority underlying interests in the asset. The effect of former subsection 160ZZS(1) of the ITAA 1936 was to deem an asset that was acquired on or before 19 September 1985 to be acquired after that date unless the Commissioner was satisfied, or found it reasonable to assume, that majority underlying interests in the asset were maintained, at all times after 19 September 1985, by persons who had majority underlying interests in the asset immediately before 20 September 1985. Paragraph 149-10(b) represents a specific testing point, requiring the Commissioner to be satisfied that there has been a continuation of majority underlying interests in the asset at all times from 19 September 1985 to immediately before the start of the 1998-99 income year. Subdivision C of Division 20 of the former Part III of the ITAA 1936 contains rules for public entities and is therefore not applicable to the Company. | Detailed Reasoning - Subdivision 149-B: Subdivision 149-B provides for when assets of a non-public entity stop being a pre-CGT asset. Entities that are regarded as a 'public entity' are listed in subsection 149-50(1) and like its predecessor includes: (a) a company shares in which (except shares that carry the right to a fixed rate of dividend) are listed for quotation in the official list of an approved stock exchange; ... (e) a company (other than one covered by paragraph (a)) all the shares in which are beneficially owned, whether directly, or indirectly through one or more interposed entities, by one or more of the following: (i) a company covered by paragraph (a); (ii) a mutual insurance company; (iii) a mutual affiliate company; (iv) a publicly traded unit trust; The Company does not fall within the definition of a 'public entity' for the purposes of Division 149. Subsection 149-30(1) is therefore applicable to the Company and provides: [An] asset stops being a pre-CGT asset at the earliest time when majority underlying interests in the asset were not held by ultimate owners who had majority underlying interests in the asset immediately before 20 September 1985. Subsection 149-30(1) applies subject to subsection 149-30(2) which states: If the Commissioner is satisfied, or thinks it reasonable to assume, that at all times on and after 20 September 1985 and before a particular time majority underlying interests in the asset were had by ultimate owners who had majority underlying interests in the asset immediately before that day, subsections (1) and (1A) apply as if that were in fact the case. Therefore, although paragraphs 149-10(b) and (c) are separate requirements, the effect of both provisions is similar; an asset of a non-public entity that was acquired on or before 19 September 1985 is a pre-CGT asset at a particular time only if: • the Commissioner is satisfied, or thinks it is reasonable to assume, that majority underlying interests in the asset have been maintained at all times since 20 September 1985 to the beginning of the 1998-99 income year (as reflected by the requirements in paragraph 149-10(b)); and • majority underlying interests in the asset have been maintained since 20 September 1985 or the Commissioner is satisfied, or thinks it is reasonable to assume, that majority underlying interests in the asset have been maintained at all times since 20 September 1985 and before a particular time (as reflected by the requirements in paragraph 149-10(c)). | Detailed Reasoning - Majority underlying interests in a CGT asset: Subsection 149-15(1) provides that 'majority underlying interests' in a CGT asset consists of: (a) more than 50% of the beneficial interests that ultimate owners have (whether directly or indirectly) in the asset; and (b) more than 50% of the beneficial interests that ultimate owners have (whether directly or indirectly) in any ordinary income that may derived from the asset. An 'underlying interest' in a CGT asset is defined in subsection 149-15(2) as "a beneficial interest that an ultimate owner has (whether directly or indirectly) in the asset or in any ordinary income that may be derived from the asset." An 'ultimate owner' is defined in subsection 149-15(3) to include an individual or a company whose constitution prevents it from making any distribution, whether in money, property or otherwise, to its members. Subsection 149-15(4) states: An ultimate owner indirectly has a beneficial interest in a CGT asset of another entity (that is not an ultimate owner) if he, she or it would receive for his, her or its own benefit any of the capital of the other entity if: (a) the other entity were to distribute any of its capital; and (b) the capital were then successively distributed by each entity interposed between the other entity and the ultimate owner. Subsection 149-15(5) states: An ultimate owner indirectly has a beneficial interest in ordinary income that may be derived from a CGT asset of another entity (that is not an ultimate owner) if he, she or it would receive for his, her or its own benefit any of a dividend or income if: (a) the other entity were to pay that dividend, or otherwise distribute that income; and (b) the dividend or income were then successively paid or distributed by each entity interposed between the other entity and the ultimate owner. In Taxation Ruling IT 2340 Income tax: capital gains: deemed acquisition of assets by a taxpayer after 19 September 1985 where a change occurs in the underlying ownership of assets acquired by the taxpayer on or before that date (IT 2340) the Commissioner adopts an approach of looking through interposed entities to determine whether natural persons hold the beneficial interests for the purposes of former section 160ZZS of the ITAA 1936, which preceded Division 149. Paragraph 2 of IT 2340 states: ... underlying interests in relation to the assets concerned mean beneficial interests held by natural persons, whether directly or through one or more interposed companies, partnerships or trusts. The clear policy of the law thus permits and requires that, for the purposes of the relevant provisions, chains of companies, partnerships and trusts are to be "looked through" in order to determine whether there has been a change in the effective interests of natural persons in the assets. (Emphasis added) Section 357-85 of Schedule 1 to the Taxation Administration Act 1953 provides that if the Commissioner has made a ruling about a relevant provision and that provision is re-enacted or remade, the ruling is taken to be about the re-enacted or remade provision, insofar as the new law expresses the same ideas as the old law. As former section 160ZZS of the ITAA 1936 expresses the same ideas as Division 149, IT 2340 equally applies to Division 149. | Detailed Reasoning - Application to discretionary trusts: The expression 'beneficial interest' as used in the definition of 'majority underlying interests' (as well as the definition of 'underlying interest') is not defined. Under ordinary legal concepts, where there is a discretionary trust deed, no beneficiary is entitled to income or capital of the trust until the trustee exercises its discretion to distribute income or to make an appointment of capital. As the beneficiary of a discretionary trust does not hold an interest in any asset of a trust or in the ordinary income derived from the asset until the trustee's discretion is exercised, it would not be possible for a discretionary trust to satisfy the continuing majority underlying interests test set out in subsection 149-30(1). However, IT 2340 sets out the Commissioner's view on the application of the 'underlying interest' and 'majority underlying interest' requirement when assets are held by the trustees of family trusts where the trustees are vested with discretionary powers as to distributions from the trusts. Paragraphs 5 to 8 of IT 2340 state as follows: 5. In relation to what are generally referred to as discretionary trusts, i.e., family trusts, the trustees of which have discretionary powers as to the distribution of trust income or property to beneficiaries, in considering the question of whether majority underlying interests have been maintained in the assets of the trust it will be relevant to take into account the way in which the discretionary powers of the trustees are in fact exercised. 6. Where a trustee continues to administer a trust for the benefit of members of a particular family, for example, it will not bring section 160ZZS into application merely because distributions to family members who are beneficiaries are made in such amounts and to such of those beneficiaries as the trustee determines in the exercise of his discretion. 7. In such a case the Commissioner would, in terms of sub-section 160ZZS(1), find it reasonable to assume that for all practical purposes the majority underlying interests in the trust assets have not changed. That is consistent with the role of the section to close potential avenues for avoidance of tax in cases where there is a substantial change in underlying ownership of assets and the legislative guidance contained in Subdivision G of Division 3 of Part III of the Act. On that basis, trust assets acquired by the trustee before 20 September 1985 would remain outside the scope of the capital gains and losses provisions of the Act. 8. On the other hand where, by the exercise of a trustee's discretionary powers to appoint beneficiaries or by amendment of the trust deed, there is in practical effect a change of 50% or more in the underlying interests in the trust assets - such as where the members of a new family are substituted as recipients of distributions from the trust in place of persons who were formerly the object of such distributions - the section would have its intended application as described. Therefore, where the trustee of a family trust continues to administer a trust for the benefit of members of a particular family, it would be reasonable for the Commissioner to assume that majority underlying ownership interests in the trust assets have not changed. ATO ID 2003/778 Income tax: CGT: majority underlying ownership and deceased estate - discretionary trusts - beneficiary a 'new owner' explains that: Taxation Ruling IT 2340 correctly reflects the position that section 160ZZS of the ITAA 1936, by its terms, necessarily supplants normal legal concepts of interests in assets. For the purposes of section 160ZZS, a beneficiary of a discretionary trust is treated as having a beneficial interest in the trust's assets. Likewise, a shareholder is treated for the purposes of section 160ZZS as having a beneficial interest in the company's assets. | Detailed Reasoning - The Company last acquired the Property before 20 September 1985 - paragraph 149-10(a).: As the Property was last acquired by the Company before 20 September 1985, the requirement of paragraph 149-10(a) is met. The Company was not, immediately before the start of the 1998-99 income year, taken under former subsection 160ZZS(1) of the ITAA 1936 to have acquired the Property on or after 20 September 1985 - paragraph 149-10(b) | Detailed Reasoning - The Property has not stopped being a pre-CGT asset of the Company because of Division 149 - paragraph 149-10(c): As mentioned, although paragraphs 149-10(b) and (c) are separate requirements to be met, both provisions are similar and the effect of both provisions is that an asset of a non-public entity that was acquired on or before 19 September 1985 is a pre-CGT asset at any particular time only if: • majority underlying interests in the asset were maintained at all times after 19 September 1985 by persons who immediately before 20 September 1985 held majority underlying interests in the asset; or • the Commissioner is satisfied or thinks it is reasonable to assume that this is the case. | Detailed Reasoning - Immediately before 20 September 1985: As at 19 September 1985, the Property was held by the Company. A company (other than a company whose constitution prevents it from making any distribution to its members) is not an 'ultimate owner' who can have an underlying interest in the asset. Establishing underlying interest requires the adoption of a 'look through' approach to trace the beneficial interest in an asset to an ultimate owner which is usually a natural person. Company J has directly owned 100% of all the shares in the Company since its incorporation before 1985. Immediately before 20 September 1985: • the shares in Company J were owned by Company X (a company), Company S (a company) and Trust W (a discretionary trust); • 100% of the shares in Company X were owned by Trust D (a discretionary trust); and • 100% of the shares in Company S were owned by Family Trust A (a discretionary trust). As mentioned, the beneficiaries of a discretionary trust that are natural persons are treated, for the purposes of former subsection 160ZZS(1) of the ITAA 1936 and Division 149 as having a beneficial interest in the trust's assets. Each of Trust D, Family Trust A and Trust W were established for the benefit of Taxpayer A, Taxpayer B and their four children, any spouse of the four children and the descendants of these beneficiaries. The beneficiaries of Trust D, Family Trust A and Trust W comprise of the members of Taxpayer A's family. The natural persons and ultimate owners who held beneficial interests in the assets of Trust D, Family Trust A and Trust W were members of that family. On this basis, immediately before 20 September 1985, the majority underlying interests in the Property were held by members of Taxpayer A's family as beneficiaries of these discretionary trusts which held the indirect interest in the Property. | Detailed Reasoning - From 20 September 1985: It is reasonable for the Commissioner to assume that members of Taxpayer A's family have been the ultimate owners of the Property and have maintained majority underlying interests in the Property since 19 September 1985, having regard to the following factors: • The Property has continuously been held by the Company and the shares in the Company have also been continuously held by Company J. • The A Class ordinary shares in Company J have continuously been held by Company X and the shares in Company X have also been continuously held by Trust D. • The non-cumulative preference shares in Company J have continuously been held by Trust W. • The B Class ordinary shares in Company J have continuously been held by Company S (until their cancellation) and, whilst the shares in Company S were transferred from Family Trust A to Trust V, the beneficiaries of Trust V were the same as those in Family Trust A. • The trustee of each of Trust D, Trust W, Family Trust A and Trust V has administered the trust for the benefit of members of Taxpayer A's family as evidenced by the history of the exercise of the discretionary powers in favour of this family. • The history of distributions by Trust D, Trust W, Family Trust A and Trust V (to the extent they were made) support that distributions have been made for the benefit of members of Taxpayer A's family. • Variations in the trust deed of Trust D and Trust W have not introduced any new persons as beneficiaries of the trust that are not members of Taxpayer A's family. • Taxpayer A and Taxpayer C1, to whom the D Class preference shares were respectively issued in December 2016 and then transferred in November 2018 were/are members of the family. Under these circumstances, pursuant to former subsection 160ZZS(1) of the ITAA 1936 and subsection 149-30(2) (and consistent with IT 2340), the Commissioner thinks it reasonable to assume that at all times on and after 20 September 1985 and until the date of the sale of the Property majority underlying interests in the Property had been held by ultimate owners (the members of Taxpayer A's family) who had such interests immediately before 20 September 1985. The Property is therefore not taken to have stopped being a pre-CGT asset of the Company pursuant to former subsection 160ZZS(1) of the ITAA 1936 or subsection 149-30(1). | Detailed Reasoning - Question 3: CGT event A1 happens under section 104-10 if you dispose of a CGT asset, but any capital gain or capital loss made from that disposal is disregarded pursuant to paragraph 104-10(5)(a) if you acquired the asset before 20 September 1985. As the Property was a pre-CGT asset of the Company at the time of its disposal, any capital gain made by the Company on the disposal of the Property is disregarded pursuant to paragraph 104-10(5)(a).

create D Class preference shares in Company J and govern their role; | effect a small change in the notional interests of the Capital Beneficiaries in Trust D; | govern and limit the ability of Taxpayer A's family members to sell their interest in Trust D; and | manage the changes in control and governance upon Taxpayer A's passing, to ensure the trustee of Trust D continues to hold the income and capital for the benefit of Taxpayer A's family.