Published on 01 May 14
by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
An article entitled “Fixed trusts and unit trusts: one and the same?”, which was published in the December 2013/January 2014 issue of this journal, considered a number of aspects of fixed trusts and unit trusts. Questions have been raised about comments that CGT event E4 should apply only to fixed trusts and, by implication, not unit trusts. This article explores the various issues, including the potential consequences of the decision of the Full Court of the Federal Court in FCT v Clark, and the relevance of ATO pronouncements.
The authors conclude that it is arguably possible to vary a trust deed to limit the impact of CGT event E4 where the trust is not a fixed trust. However, where a trust satisfies the definition of a fixed trust, or has a prohibition on variation as outlined, there will be no ability to leverage off the Clark decision to minimise the potential application of CGT event E4.
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