Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_14:p13
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 14 (pt 13/40)
Character Range: 67509–69988

the asset before 20 September 1985.

104‑70  Capital payment for trust interest: CGT event E4

 (1) CGT event E4 happens if:

 (a) the trustee of a trust makes a payment to you in respect of a unit or an interest in the trust (except for *CGT event A1, C2, E1, E2, E6 or E7 happening in relation to it); and

 (b) some or all of the payment (the non‑assessable part) is not included in your assessable income.

  The payment can include giving property: see section 103‑5.

 (2) In working out the non‑assessable part, disregard any part of the payment that is:

 (a) *excluded exempt income; or

 (b) *exempt income subject to withholding tax; or

 (c) paid from an amount that has been assessed to the trustee.

 (3) The time of the event is:

 (a) just before the end of the income year in which the trustee makes the payment; or

 (b) if another *CGT event (except CGT event E4) happens in relation to the unit or interest or part of it after the trustee makes the payment but before the end of that income year—just before the time of that CGT event.

 (4) You make a capital gain if the sum of the amounts of the non‑assessable parts (adjusted by subsection (7)) of the payments made in the income year made by the trustee in respect of the unit or interest is more than its *cost base.

Note: You cannot make a capital loss.

 (5) If you make a *capital gain, the *cost base and *reduced cost base of the unit or interest are reduced to nil.

 (6) However, if that sum is not more than the *cost base:

 (a) the cost base is reduced by that sum; and

 (b) the *reduced cost base is reduced by that sum (without the subsection (7) adjustment).

Example: Mandy owns units in a unit trust that she bought on 1 July 1999 for $10 each. During the 1999‑2000 income year the trustee makes 4 non‑assessable payments of $0.50 per unit. If at the end of the income year Mandy's cost base for each unit (including indexation) would otherwise be $10.10, the payments require that it be reduced by $2, giving a new cost base of $8.10. If Mandy sells the units (CGT event A1) in the 2000‑01 year for more than their cost base at that time, she will make a capital gain equal to the difference.

 (7) The amount of the non‑assessable part is adjusted to exclude any part of it that is attributable to:

 (a) deductions under Division 43 (about capital works); or

 (b) an amount that is not included in the assessable income of an entity because of:

 (i) section