*Oswal v FCT – Taxpayers have appealed a decision that the exercise of a special power of appointment in favour of 2 beneficiaries triggered CGT Event E1 [46]

The taxpayers have lodged a notice of appeal to the Full Federal Court against the decision in Oswal v FCT [2013] FCA 745. In that case, the Federal Court has held that the legal effect of the decision of a trustee of a discretionary trust to exercise a special power of “appointment” to make 2 beneficiaries of the trust absolutely entitled to part of the corpus of the trust was to trigger CGT event E1 (creation of trust over assets). This was despite the fact that the taxpayer argued that the effect of the declaration was “merely” to establish a “separate fund of assets under the umbrella of the trust”.

[LTN 157, 15/8/13]