CGT discount for corporate trustee

We have a property held in a fixed unit trust, managed with a corporate trustee. If we sell, are we entitled to the 50% CGT discount.

 

Most probably...

Need more info

 

Who is 'we'?

 

NSW property held in fixed unit trust 100% share to me. I am both director and beneficiary.

 

There are 2 aspects to consider. The trust selling the property and getting the money out of the trust.

 

Husband and wife, both directors

 

it is irrelevant who the directors are for CGT purposes.

 

What type of property ?

What was the intention when you purchased the property ?

Im assuming the property is held in the unit trust and not by the corporate trustee in its own right ? Is that correct ?

What is the value of the units issued in the balance sheet ?

Who holds the units in the unit trust as per the unit trust register ?

What is the division 43 capital works you have claimed during the life of the property ?

 

- The property is residential.
- The intention of the property (long term) was to be PPR.
- Trust (fixed unit trust) owns the property, company is a non-trading entity
- $600K
- Me 100%
- Last point is unknown at this point.

Cheers

 

The simple answer from a non accountant...for assets held over 12mths, the CGT discount would normally apply to assets owned/held by trusts (including Unit Trusts) in the same way it would for an individual ...which flows through to the unit holder.

When a company owns asset as trustee for the benefit of a trust, it is eligible for CGT discount as per above.

If a company owns asset in its own right (ie not as trustee of a trust), no CGT discount as Companies aren't eligible for CGT discounts.

 

Ok looks as though a capital asset. So the 50% discount would apply.

Note you will need to manage CGT event E4 when the funds come out or otherwise potential double taxation.

 

The intent is to transfer the property out of the trust and into my name.

 

Whoa....There may be another way

NSW property held in fixed unit trust 100% share to me. I am both director and beneficiary. If you were sole trustee of the trust as well.........?

 

What are the CGT consequences of the trust merging? and stamp duty.

 

Corporate trustee x 2 directors

 

Irrelevant.

 

accountants cant give advice on stamp duty so asking Paul or I or any accountant wouldnt be able to be answered

Paul would need to refer that strategy to Batten anyway as it would be a breach of his previous employment contract and Non Disclosure agreement. But Paul could refer it to Batten.

 

Don't forget to consider the deductibility of any interest.

 

CGT event. CGT is payable. Unavoidable. However market value is used and means the Main Residence Exemption may be available after that date.

Maybe no stamp duty is the key benefit

 

Chris Batten isnt a lawyer, he is an accountant and I always suggest a solicitor assist and advise on the process of merger that complies with common law decisions and the OSR views on trust merger.

NDAs dont apply to common law principles - Its a bit like suggesting I cant mention interest deductibility for unit trusts because I know a lot about unit trusts from my time with MGS...7 years soon.