Private ruling: Income tax – capital gains tax - CGT event E1
Date of advice: 12 October 2018
Published: December 2018
Ruling period: Financial year ended 30 June 2019
Date scheme commenced: 1 July 2018

Ruling: Q1: Will the exclusion of a named beneficiary cause capital gains tax event E1 to happen? | A1: No. The exclusion of a named beneficiary proposed in the amendment to the Trust deed will not cause a termination or resettlement of the Trust as this change is provided for in the terms of the trust deed and as such CGT event E1 will not happen.

Relevant facts and circumstances: The trustee for the Trust was established by deed with appointers/principals and named beneficiaries person A and person B. Clause X of the Trust deed provides the trustee the power to declare by instrument in writing or resolution that any person or class of persons shall be excluded as Beneficiaries for the purposes of this Deed. The Trustee wishes to exclude person A as a beneficiary in accordance with X of the Deed. You have provided an unexecuted copy of the Deed of Amendment for the trust which has been considered as part of this private ruling.

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