Private ruling: CGT - promissory note to trusts
Date of advice: 12 September 2024
Published: 21 October 2024
Ruling period: Year ended 30 June 20XZ | Year ended 30 June 20XA
Date scheme commenced: 20XY

Ruling: Q1: Will section 152-125 of the Income Tax Assessment Act 1997 (ITAA 1997) apply to the proposed payment by the Company to B and C by means of a promissory note of an amount equal to the gain on the sale of the Property? | A1: Yes. | Q2: Does the proposal to gift the promissory note to Trust D and Trust E which will then be offset against the amount they owe to the Company, trigger a debt forgiveness under section 109F of the Income Tax Assessment Act 1936 (ITAA 1936)? | A2: No. | Q3: Will the proposed gifting of the promissory note to Trust D and Trust E trigger CGT event A1 and result in a capital gain under section 104-10 of the ITAA 1997? | A3: No.

Relevant facts and circumstances: You received Private ruling Authorisation number XXXXXXXXXXXXX on a date in 20XY, which applied for the 20XW and 20XX years. You requested an extension to that Private ruling and received Private ruling Authorisation number XXXXXXXXXXXXY on a date in 20XX, which applied for the 20XY year. There has been another delay in the implementation of the arrangement described in those Private rulings. There have been some changes, but the material facts of the arrangement remain the same. You have requested that the Commissioner extend the period of the Private ruling to 20XZ.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 subsection 110-25(1) | Income Tax Assessment Act 1997 subsection 112-20(1) | Income Tax Assessment Act 1997 section 116-20 | Income Tax Assessment Act 1997 subsection 116-30(1) | Income Tax Assessment Act 1997 section 149-15 | Income Tax Assessment Act 1997 section 149-30 | Income Tax Assessment Act 1997 section 149-35 | Income Tax Assessment Act 1997 section 152-10 | Income Tax Assessment Act 1997 section 152-35 | Income Tax Assessment Act 1997 section 152-40 | Income Tax Assessment Act 1997 section 152-110 | Income Tax Assessment Act 1997 section 152-125 | Income Tax Assessment Act 1997 section 245-35 | Income Tax Assessment Act 1997 section 328-125 | Income Tax Assessment Act 1936 section 44 | Income Tax Assessment Act 1936 subsection 109F | Income Tax Assessment Act 1936 subsection 109L(2)

Reasons for decision: Summary: The material facts of the arrangement have not changed. There has been no change to the application of the income tax legislation, case law and ATO view to this arrangement since Private rulings Authorisation numbers XXXXXXXXXXXXX and XXXXXXXXXXXXY issued. The reasons for decision remain the same as in Private rulings Authorisation numbers XXXXXXXXXXXXX and XXXXXXXXXXXXY.