Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_14:p15
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 14 (pt 15/40)
Character Range: 72153–74732

time of the event) is more than the *cost base of the beneficiary's interest in the trust capital to the extent it relates to the asset.

  The beneficiary makes a capital loss if that market value is less than the *reduced cost base 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 the beneficiary:

 (a) *acquired the *CGT asset that is the interest (except by way of an assignment from another entity) for no expenditure; or

 (b) acquired it before 20 September 1985.

  Expenditure can include giving property: see section 103‑5.

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 beneficiary in satisfaction of the beneficiary's interest, or part of it, in the trust capital.

Note: Division 128 deals