03 Nov 08 Trust cloning exceptions abolishedIn a media release issued on 31 October 2008, the Assistant Treasurer, Chris Bowen, announced that the Government will remove the CGT trust cloning exception to CGT events E1 and E2. The Assistant Treasurer said:
"Removing the trust cloning exception is consistent with the policy principle of taxing capital gains that arise where there is a change in ownership of an asset as typically occurs on the creation of a trust over a CGT asset (event E1) and on transferring a CGT asset to an existing trust (event E2).
The other current exception to CGT events E1 and E2, where the taxpayer is the sole beneficiary of the relevant trust that is not a unit trust and the taxpayer is absolutely entitled to the asset as against the trustee, will be retained.
A mere change of trustee of a single trust will continue not to trigger a CGT taxing point."
Legislation giving effect to this measure will be introduced as soon as practicable. An exposure draft of the legislation will be released for consultation on the Treasury website after consulting on the design of these amendments. The amendments will apply to CGT events happening after 31 October 2008.
For a copy of the media release, No 2008/92, 31 October 2008, go here.