Income Tax Assessment Act 1997

CGT event I2 happens if a trust stops being a *resident trust for CGT purposes.

The time of the event is when the trust stops being one.

The trustee needs to work out if it has made a *capital gain or a *capital loss for each *CGT asset that it owned (in the capacity as trustee of the trust) just before the time of the event except one that is *taxable Australian property:

covered by item 1 or 3 of the table in section 855‑15; or

covered by item 4 of that table because it is an option or right to *acquire a *CGT asset covered by item 1 or 3 of that table.

The trustee makes a capital gain if the *market value of the asset (at the time of the event) is more than the asset’s *cost base. The trustee makes a capital loss if that market value is less than the asset’s *reduced cost base.

If the asset is an *indirect Australian real property interest, or an option or right to acquire such an interest, this Part and Part 3‑3 apply to the asset as if the first element of the *cost base and *reduced cost base of the asset (just after the time of the event) were its *market value at the time of the event.

Subsection (4A) does not apply if the *capital gain or *capital loss the trustee makes is disregarded under subsection (5).

A *capital gain or *capital loss the trustee makes is disregarded if it *acquired the asset before 20 September 1985.