Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_14:p11
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 14 (pt 11/40)
Character Range: 62816–65395

of the entitlement.

 (2) The time of the event is:

 (a) when you enter into the contract with the other entity; or

 (b) if there is no contract—when you grant the right to receive *ordinary income or *statutory income.

 (3) You make a capital gain if the *capital proceeds from the grant of the right are more than the expenditure you incurred in granting it. You make a capital loss if those *capital proceeds are less.

 (4) The expenditure can include giving property: see section 103‑5. However, it does not include an amount you have received as *recoupment of it and that is not included in your assessable income, or an amount to the extent that you have deducted or can deduct it.

Subdivision 104‑E—Trusts

Table of sections

104‑55 Creating a trust over a CGT asset: CGT event E1
104‑60 Transferring a CGT asset to a trust: CGT event E2
104‑65 Converting a trust to a unit trust: CGT event E3
104‑70 Capital payment for trust interest: CGT event E4
104‑75 Beneficiary becoming entitled to a trust asset: CGT event E5
104‑80 Disposal to beneficiary to end income right: CGT event E6
104‑85 Disposal to beneficiary to end capital interest: CGT event E7
104‑90 Disposal by beneficiary of capital interest: CGT event E8
104‑95 Making a capital gain
104‑100 Making a capital loss
104‑105 Creating a trust over future property: CGT event E9

104‑55  Creating a trust over a CGT asset: CGT event E1

 (1) CGT event E1 happens if you create a trust over a *CGT asset by declaration or settlement.

 (2) The time of the event is when the trust over the asset is created.

 (3) You make a capital gain if the *capital proceeds from the creation are more than the asset's *cost base. You make a capital loss if those *capital proceeds are less than the asset's *reduced cost base.

Cost base rule

 (4) If you are the trustee of the trust and no beneficiary is absolutely entitled to the asset as against you (disregarding any legal disability), the first element of the asset's *cost base and *reduced cost base in your hands is its market value when the trust is created.

Exceptions

 (5) CGT event E1 does not happen if:

 (a) you are the sole beneficiary of the trust and:

 (i) you are absolutely entitled to the asset as against the trustee (disregarding any legal disability); and

 (ii) the trust is not a unit trust; or

 (b) the trust is created by transferring the asset from another trust, and the beneficiaries and terms of both trusts are the same.

 (6) A *capital gain or *capital loss you make is disregarded if you *acquired the asset