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Assets owned by an individual or under a partnership or trust structure are disposed of to a special purpose company ('SPC'). Roll-over relief is claimed under Division 122 of the Income Tax Assessment Act 1997 ('ITAA 1997'). 2. A "bare" trust (First Trust) is created over the SPC assets with the sole beneficiary of the trust being the SPC. The trust deed allows further beneficiaries to be appointed with the consent of the original beneficiary. First Trust is a discretionary trust but is referred to as a hybrid or convertible trust. 3. SPC consents to the trustee appointing new beneficiaries of the First Trust which are trustees of other trusts and may be associates of the promoter of the arrangement. 4. A second trust is created (Second Trust) of which the beneficiaries are the original owner/s of the assets. The assets are then sold to this Second Trust for a nominal amount. However, the promoter argues that this sale for CGT purposes is deemed to have occurred at market value. This means that the First Trust has a deemed capital gain and the Second Trust acquires the assets with a market value cost base. 5. The Second Trust sells the assets for market value to a third party purchaser. 6. The Second Trust claims to have no taxable capital gain and distributes the sale proceeds (after deducting the promoter's fees) to the original owners in an arguably tax free manner, for example, as a loan or capital distribution. 7. The First Trust returns the deemed assessable capital gain and distributes this to the newly appointed beneficiaries, which in turn distribute this income to a beneficiary which has significant capital losses or is tax exempt such as a charity. No funds are actually received by the charity or other beneficiary.