Private ruling: Income tax - trusts
Date of advice: 17 June 2021
Published: August 2021
Ruling period: Year ended DD MM YYYY | Year ending DD MM YYYY
Date scheme commenced: DD MM YYYY

Ruling: Q1: Does Capital Gains Tax (CGT) event E1 or E2 occur when additional shareholders are added to the trustee company? | A1: No. Adding additional shareholders to the trustee company 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 and as such CGT event E1 or E2 will not occur. This change will not cause a resettlement of the trust.

Relevant facts and circumstances: You are a discretionary family trust (Trust X). Company Y is the trustee company for Trust X. Trust X owns shares in Company B. Company Y consists of two shareholders. Trust X intend add additional shareholders to Company Y. Trust X has operated at a loss for the past X years and there has been no income or capital distributions.

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


This ruling applies for the following periods: