Published on 01 Dec 13
by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
CGT event C2 applies when a beneficiary’s ownership of an intangible “CGT asset” is either redeemed, cancelled, released, discharged, satisfied, has expired or is abandoned, surrendered or forfeited. The relevant statutory provision is broadly drafted and it appears possible that it could apply to the ending of a beneficiary’s interest in a trust. This article examines the nature of a beneficiary’s interest in a trust, whether this is an asset for CGT purposes, and whether or not CGT event C2 applies when this interest is surrendered or forfeited. It also discusses when CGT event E4 applies to payments in respect of interests in trusts other than unit trusts.
The author concludes that a beneficiary’s interest in a trust is a CGT asset, but that CGT event C2 will not usually apply to such an interest, and that CGT event E4 also has very limited application, unless the trust is a unit trust.