I am seeking clarification regarding the calculation of Capital Gains Tax (CGT) in the context of a unit trust where units are being sold to beneficiaries during the middle of a financial year. The trust is currently carrying retained losses and negative net assets on its balance sheet.
Specifically, I would like to confirm the following:
- Cost Base Determination: In light of the trust’s negative net assets and retained losses, should the cost base of the units be reduced, or can we proceed with a zero cost base, treating 100% of the sale proceeds as subject to CGT?
- Valuation Method: Is it necessary to obtain an external valuation (e.g., income-based or net asset method) to determine the cost base of the units at the time of sale, or can we rely on the sale price as the fair market value for CGT purposes?
- Trust and Unit Sale Structure: Are there any specific ATO guidelines or rulings we should refer to regarding CGT calculations in relation to the sale of units in a trust under these circumstances?
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96 views
3 replies