Changes to CGT concessions for Trusts with charities as beneficiaries
The Government has legislated to change the way discretionary trusts can access the concessions available for Capital Gains Tax on the disposal of a business from a Trust.
Previously, the Tax Offfice held that where a Trust had charities as potential beneficiaries, then the trust would breach the $5 million net asset threshhold which means the concessional treatment under CGT would not be available.
The legislation now holds that discretionary trusts can access the benefits provided that they have not distributed more than 40% of their income or capital to charities for the 4 years prior to the capital gains tax event occurring. This means that any disposal of business assets by a trust needs to be carefully planned for.
The legislation is retrospective to 21 September 1999 which means that any trusts which have been assessed on disposals and which have not claimed the concessions may be able to amend their returns.
Should you believe there is an opportunity for us to assist you with planning for a disposal or amending returns which have not taken the concessions in to account, please contact us.