Preamble
No. The unit in the unit trust is the relevant CGT asset for capital gains purposes.
The scheme of the Income Tax Assessment Act 1997 is to treat units in a unit trust as the relevant asset for the capital gains provisions rather than any interest a unit holder might have in the underlying property of the unit trust. Note 1 to section 108-5 specifically identifies units in a unit trust as examples of CGT assets.
If units were not treated as the relevant assets, every issue of units in a unit trust would involve fractional disposals by every existing unit holder of interests in the property of the unit trust and every redemption of units in a unit trust would involve fractional acquisitions by all other unit holders of interests in the property of the unit trust. This outcome is neither intended by the legislature nor supported by the law.
A unit holder in a unit trust is not capable of being absolutely entitled to a CGT asset forming part of the underlying property of the unit trust for the purposes of section 106-50 of the Income Tax Assessment Act 1997 .
We invite you to comment on this Draft Taxation Determination. We are allowing 4 weeks for comments before we finalise the Determination. If you want your comments considered, please provide them to us within this period. Comments by Date: 10 September 1999 Contact officer details have been removed following publication of the final ruling.