Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_14:p16
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 14 (pt 16/40)
Character Range: 74511–77042

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 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 interest, or the part of it, being satisfied. The beneficiary makes a capital loss if that market value is less than the *reduced cost base of that interest or part.

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.

104‑90  Disposal by beneficiary of capital interest: CGT event E8

 (1) CGT event E8 happens if:

 (a) you are the beneficiary under a trust (except a unit trust or a trust to which Division 128 applies); and

 (b) you did not give any money or property to *acquire the *CGT asset that is your interest in the trust capital and you did not acquire it by assignment; and

 (c) you *dispose of the interest, or part of it (but not to the trustee).

Note: Division 128 deals with the effect of death.

 (2) The time of the event is:

 (a) when you enter into the contract for the *disposal; or

 (b) if there is no contract—when you stop owning the interest or part.

Note 1: You work out if you have made a capital gain or capital loss under sections 104‑95 and 104‑100.

Note 2: There is a special indexation rule for this event: see section 114‑10.

104‑95  Making a capital gain

You are the only beneficiary

 (1) If you are the only beneficiary with an interest in the trust capital and you *dispose of that interest, you work out if you have made a *capital gain in this way: