Background:
Discretionary family trust (Trust) made capital gains by selling an active asset held for more than 12 months.
There is only one beneficiary (individual) who will be entitled to whole capital gains (CG).
Trust/individual both are eligible for small business exemption under division 152 and 12 months discount.
Questions:
In Trust tax return: Will trust distribute GROSS capital gains or NET CG after applying 12-month discount
and also will Trust apply active asset discount & retirement exemption on behalf of beneficiary?
In beneficiary tax return:
Beneficiary has also got old capital losses
Would capital gains distribution be grossed up and firstly capital losses be applied?
To summarize, the question is at which level (Trust or beneficiary) these discounts/exemptions be availed in the respective tax returns?
Thanks
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