Document ID: chunk:federal_register_of_legislation:C2025C00029:section:7:p3
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 7 (pt 3/40)
Character Range: 1833241–1835807

of that beneficiary's interest in the trust capital to the extent it relates to the asset.

Exceptions for beneficiary
 (6) A *capital gain or *capital loss the beneficiary makes is disregarded if:
 (a) the beneficiary *acquired the *CGT asset that is the interest (except by way of an assignment from another entity) for no expenditure; or
 (b) the beneficiary acquired it before 20 September 1985; or
 (c) all or part of the capital gain or capital loss the trustee makes from the *CGT event is disregarded under Subdivision 118‑B (about main residence).
Expenditure can include giving property: see section 103‑5.
Note 1: For provisions affecting the application of Subdivision 118‑B to the trustee, see sections 118‑215 to 118‑230.
Note 2: There are also exceptions for employee share trusts: see sections 130‑80 and 130‑90.

104‑80  Disposal to beneficiary to end income right: CGT event E6
 (1) CGT event E6 happens if the trustee of a trust (except a unit trust or a trust to which Division 128 applies) *disposes of a *CGT asset of the trust to a beneficiary in satisfaction of the beneficiary's right, or part of it, to receive *ordinary income or *statutory income from the trust.
Note: Division 128 deals with the effect of death.
 (2) The time of the event is when the disposal occurs.

Trustee makes a capital gain or loss
 (3) The trustee makes a capital gain if the *market value of the asset (at the time of the disposal) is more than its *cost base. It makes a capital loss if that market value is less than the asset's *reduced cost base.

Exception for trustee
 (4) A *capital gain or *capital loss the trustee makes is disregarded if it *acquired the asset before 20 September 1985.

Beneficiary makes a capital gain or loss
 (5) The beneficiary makes a capital gain if the *market value of the asset (at the time of the disposal) is more than the *cost base of the right, or the part of it. The beneficiary makes a capital loss if that market value is less than the *reduced cost base of the right or part.
Note: If the beneficiary did not pay anything for the right, the market value substitution rule does not apply: see section 112‑20.

Exception for beneficiary
 (6) A *capital gain or *capital loss the beneficiary makes is disregarded if it *acquired the *CGT asset that is the right before 20 September 1985.

104‑85  Disposal to beneficiary to end capital interest: CGT event E7
 (1) CGT event E7 happens if the trustee of a trust (except a unit trust or a trust to which Division 128 applies) *disposes of a *CGT asset of the trust to a