On Wed 13.7.2016, the ATO issued the following Class Ruling:
- CR 2016/50: AMP Capital Community Infrastructure Fund – capital reallocation. It applies from 1 July 2015 to 30 June 2016.
Extract from Class Ruling
Class of entities
3. The class of entities to which this Ruling applies is the unit holders of the AMP Capital Community Infrastructure Trading Trust (TT) and the AMP Capital Community Infrastructure Holding Trust (HT) who:
- participated in the scheme that is the subject of this Ruling;
- did not hold their respective units in TT as revenue assets (as defined in section 977-50) nor as trading stock (as defined in subsection 995-1(1)) – that is, the holders held their units, broadly, on capital account
- acquired their respective units in TT on or after 20 September 1985, and
- are not subject to the taxation of financial arrangements (TOFA) rules in Division 230 in relation to gains and losses on their units in TT.
( Note: Division 230 will generally not apply to individuals unless they have made an election for it to apply to them.
…
Ruling
Not assessable under section 6-5
18. The payment by the Trustee of TT of $0.240217049 per unit is not included in a TT unit holder’s assessable income under section 6-5.
Unit trust dividend
19. The payment by the Trustee of TT to the TT unit holders constitutes a unit trust dividend (as defined in section 102M of the ITAA 1936).
20. No part of the payment by the Trustee of TT is taken to be paid out of profits derived by the Trustee of TT for the purposes of subsection 102T(19) of the ITAA 1936.
CGT event E4
21. CGT event E4 happens in respect of each TT unit when the Trustee of TT made a payment of $0.240217049 per unit to the unit holders of TT. None of the payment is included in the assessable income of the TT unit holders (section 104-70).
22. The time of CGT event E4 is just before the end of the income year in which the Trustee of TT makes the payment (paragraph 104-70(3)(a)).
23. A TT unit holder will make a capital gain when CGT event E4 happens if the amount of the non-assessable payment of $0.240217049 exceeds the cost base of the unit (subsection 104-70(4)). A TT unit holder cannot make a capital loss when CGT event E4 happens to their TT units.
24. If the TT unit was acquired by an Australian resident unit holder at least 12 months before the time of CGT event E4 (see paragraph 22), a capital gain from CGT event E4 happening to that unit may qualify as a discount capital gain under subsection 115-25(1), provided the other conditions in Subdivision 115-A are satisfied.
25. If a TT unit holder makes a capital gain when CGT event E4 happens, the cost base and reduced cost base of the TT unit will be reduced to nil (subsection 104-70(5)).
26. If the non-assessable payment of $0.240217049 per TT unit made by the Trustee of TT is less than or equal to the cost base of a TT unit, the cost base and reduced cost base of the TT unit will be reduced by that amount (subsection 104-70(6)).
Cost base of HT units
27. The fourth element of the cost base and reduced cost base of a HT unit will increase by $0.240217049 per unit, which is the amount of the payment by the Trustee of TT that was compulsorily applied on behalf of the TT unit holders by paying up an additional amount in respect of all the current units in HT (which were held, in the same proportions, by the TT unit holders) (subsections 110-25(5) and 110-55(2)).