Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_14:p12
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 14 (pt 12/40)
Character Range: 65167–67725

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 before 20 September 1985.

104‑60  Transferring a CGT asset to a trust: CGT event E2

 (1) CGT event E2 happens if you transfer a *CGT asset to an existing trust.

 (2) The time of the event is when the asset is transferred.

 (3) You make a capital gain if the *capital proceeds from the transfer 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.

 (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 asset is transferred.

Exceptions

 (5) CGT event E2 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.

Note: There is also an exception for employee share trusts: see section 130‑90.

 (6) A *capital gain or *capital loss you make is disregarded if you *acquired the asset before 20 September 1985.

104‑65  Converting a trust to a unit trust: CGT event E3

 (1) CGT event E3 happens if:

 (a) a trust (that is not a unit trust) over a *CGT asset is converted to a unit trust; and

 (b) just before the conversion, a beneficiary under the trust was absolutely entitled to the asset as against the trustee (disregarding any legal disability the beneficiary is under).

 (2) The time of the event is when the trust is converted.

 (3) The trustee of the original trust makes a capital gain if the market value of the asset (when the trust is converted) is more than the asset's *cost base. The trustee makes a capital loss if that market value is less than the asset's *reduced cost base.

Exception

 (4) A *capital gain or *capital loss the trustee makes is disregarded if it *acquired 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