Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) CGT event E6 happens if the trustee of a trust (except 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 right, or part of it, to receive * ordinary income or * statutory income from the trust.
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 right, or the part of it. The beneficiary makes a capital loss if that market value is less than the * reduced cost base of the right or part.
Note: If the beneficiary did not pay anything for the right, the market value substitution rule does not apply: see section 112 - 20.
Exception for beneficiary
(6) A * capital gain or * capital loss the beneficiary makes is disregarded if it * acquired the * CGT asset that is the right before 20 September 1985.