Document ID: chunk:federal_register_of_legislation:C2010C00615:clause:4_5:p1
Version: federal_register_of_legislation:C2010C00615
Segment Type: clause
Provision Reference: sch 4 cl 5 (pt 1/4)
Character Range: 295118–297810

5  After section 104‑70
Insert:

104‑71  Effect on non‑assessable part if trustee claimed general discount or small business reduction

When this section applies

 (1) If:
 (a) *CGT event E4 happens because of a payment to you (the actual payment); and
 (b) you are taken to have a *capital gain under paragraph 115‑215(3)(b) or (c) (your notional gain) in respect of a corresponding trust gain (the trust gain); and
 (c) all or some of the non‑assessable part under section 104‑70 of the actual payment is attributable to proceeds from the trust gain;
follow the steps in this section to determine whether the non‑assessable part (the original non‑assessable part) of the actual payment is reduced.

Work out the maximum non‑assessable part of a notional payment to you of your notional gain

 (2) First, work out what would have been under section 104‑70 the non‑assessable part (the maximum non‑assessable part) of a payment if:
 (a) the whole of the payment had been attributable to proceeds from the trust gain; and
 (b) the payment had been the only payment to you, by the trustee, of an amount so attributable; and
 (c) the amount of the payment had been:
 (i) if the trustee did not include indexation in the *cost base of the *CGT asset in working out the trust gain—the amount of your notional gain under paragraph 115‑215(3)(b) or (c); or
 (ii) if the trustee did include indexation in the *cost base—what would have been the amount of your notional gain if the trustee had worked out the trust gain without indexation.

Note: If more than one beneficiary is presently entitled to a share of the income of the relevant trust estate, the notional gain for each beneficiary will be only so much of the trust gain (calculated without indexation) as that beneficiary is presently entitled to.

Example: A trust has a trust gain of $10,000 which is reduced to $5,000 under subsection 102‑5(1) by the general concession. David, the sole beneficiary of the trust, includes that $5,000 in his assessable income under Division 6 of Part III (trust income) of the Income Tax Assessment Act 1936.

 If David had received a capital payment of $10,000 from the proceeds of the trust gain, the non‑assessable part under section 104‑70 would have been $5,000: the $10,000 reduced by the $5,000 already included in David's assessable income. That non‑assessable part is the maximum non‑assessable part.

Work out the concession amount for your notional gain

 (3) Next, work out the total (the concession amount) of:
 (a) the amount (if any) by which the choice of indexation reduced your notional gain from what it would have been without the indexation; and
 (b) the amount (if any) by which