Monthly tax special topic

Section 100A of the ITAA 1936, an integrity provision, has received a lot of attention recently. We consider its implications for distributions from trusts having regard to:

• what is an ordinary family or commercial dealing
• the Court decisions in Guardian and other significant cases
• the ATO‚Äòs guidance
• the importance of documentation and other risk management strategies.

This topic covers the common CGT rollovers available to taxpayers that realise a capital gain:

• The same asset roll-overs - Subdivs 122-A, 122-B, 124-N, 126-A and 126-B; 126-C, 126-D, 126-E, 126-G
• Replacement asset roll-overs - Subdivs 122-A, 122-B, 124-B, 124-C, 124-D, 124-E, 124-F, 124-I, 124-J, 124-K, 124-N, 124-P, 124-Q, 124-R and 124-S
• Scrip for scrip roll-over - Subdiv 124-M
• Demerger roll-over - Div 125
• Roll-overs for business restructures - Div 615
• Small business restructure roll-over - Subdiv 328-G

This topic covers the basic conditions that must be satisfied for a taxpayer to access the small business CGT concessions, namely:

• the 15-year exemption
• the 50 per cent reduction
• the retirement exemption
• the small business roll-over.

It further includes:

• the four basic conditions which an entity must satisfy for eligibility for the small business CGT concessions in Div 152
• the additional conditions that must be satisfied where the relevant CGT asset disposed of by the taxpayer consists of shares in a company or an interest in a trust.