Private ruling: The recognition of the ABC Trust as a PST
Published: January 2014
Ruling period: The year ended 30 June 2014, and each subsequent income year.
Date scheme commenced: 1. ABC Trust was established as a unit trust in 199X with X, Y and Z as unit holders.

Ruling: Q1: For so long as the ABC Trust is a pooled superannuation trust (PST), will any distribution of income be free from tax in the hands of X as unit holder, in accordance with section 295-105 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. | Q2: For so long as the ABC Trust is a PST, will any gain or loss on disposal of units in the ABC Trust by A (as trustee of X) be ignored for income tax purposes under section 6-5 and section 8-1, in accordance with section 295-85(2) of the ITAA 1997, and for capital gains tax purposes, in accordance with section 118-350 of the ITAA 1997? | A2: Yes. | Q3: For so long as the ABC Trust is a PST, will X be permitted to transfer liability for tax in respect of contributions to the ABC Trust in accordance with the rules and limits contained in section 295-260 of the ITAA 1997? | A3: Yes | Q4: Are the tax consequences for X of the ABC Trust being recognised as a PST the result of a declaration or the giving of a notice expressly provided for by the ITAA 97, being the notice given by APRA in accordance with section 48 of the Superannuation Industry (Supervision) Act 1993 , and therefore not tax benefits for the purposes of Part IVA of the Income Tax Assessment Act 1936 ? | A4: Yes

Relevant facts and circumstances: 1. ABC Trust was established as a unit trust in 199X with X, Y and Z as unit holders. 2. Y and Z redeem their units in the ABC Trust leaving X, a superannuation fund, the sole unit holder. 3. The ABC Trust has carried forward losses. 4. ABC Trust then proposes a transaction under which it will become a pooled superannuation trust.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 177C | Income Tax Assessment Act 1936 section 177CB | Income Tax Assessment Act 1936 section 177D | Income Tax Assessment Act 1997 section 118-350 | Income Tax Assessment Act 1997 section 295-5 | Income Tax Assessment Act 1997 section 295-85 | Income Tax Assessment Act 1997 section 295-260 | The Superannuation Industry (Supervision) Act 1993 section 10 | The Superannuation Industry (Supervision) Act 1993 section 40 | The Superannuation Industry (Supervision) Act 1993 section 48 | The Superannuation Industry (Supervision) Act 1993 section 52

Reasons for decision: Summary: Section 295-105 of the Income Tax Assessment Act 1997 (ITAA 1997), states that the assessable income of a complying superannuation fund, complying approved deposit fund or pooled superannuation trust (PST) does not include amounts derived by the entity because it holds units in a PST. Therefore, X as the holder of the units and a superannuation fund in itself will not include in its assessable income, amounts derived because it holds units in the ABC Trust from the time the ABC Trust becomes a PST. Section 6-5 of the ITAA 1997 and section 8-1 of the ITAA 1997 should not apply to gain or loss on disposal by A, as trustee of X of units in the ABC Trust. Further, section 118-350 of the ITAA 1997 will apply to disregard a capital gain or loss in relation to A as trustee for X, disposing of units in the ABC Trust. In accordance with section 295-260 of the ITAA 1997, the superannuation provider in relation to a complying superannuation fund (the transferor) may reduce the amount that would otherwise be included in the fund's assessable income for an income year under Subdivision 295-C by agreement with another entity (the transferee) in which it holds investments. Based on the facts and circumstances it has been determined that Part IVA does not apply.