MGS Private · Federal Tax Services
Structuring to Avoid
Unintended Capital Gains
Many common transactions — restructures, trust deed amendments, distributions and refinancing arrangements — can trigger unintended capital gains if not properly structured. MGS Private identifies and eliminates these risks before the transaction is completed.
CGT Risk Identification
Common sources of
unintended CGT
The most common cause of unintended capital gains is proceeding with a transaction without first identifying the CGT consequences. MGS Private reviews every transaction before it is completed — identifying all CGT events that could be triggered and advising on how to avoid or minimise them.
- Trust deed amendments that trigger a resettlement — a deemed disposal at market value
- Changes to the trustee or appointor of a trust — CGT Event E1 or E2 risk
- Distributions of capital from a trust — CGT Event E4 where cost base not maintained
- Unit redemptions — triggering gains at unit holder level even where no cash distributed
- Conversion of a discretionary trust to a unit trust — resettlement risk
- Refinancing — where the refinancing principle is not correctly applied
- Division 7A deemed dividends interacting with cost base in company shares
- Value shifting — inadvertent shifts between related parties
- Debt forgiveness — net forgiven amount rules under Division 245
- Death of a unit holder — potential CGT event on transmission of units
MGS Private’s Approach
Identifying and eliminating risk before it crystallises
Pre-Transaction Review
Before a restructure, distribution, deed amendment or other transaction is completed, MGS Private reviews the proposed steps to identify any unintended CGT consequences — and advises on restructuring the steps to eliminate or minimise them.
Trust Deed Analysis
Advising on whether a proposed deed amendment constitutes a resettlement — the most common source of unintended CGT in trust law. MGS Private reviews the existing deed and proposed amendment to assess the risk and identify approaches that do not trigger a resettlement.
Private Ruling Applications
Where the CGT position is uncertain, MGS Private can prepare a private ruling application to the ATO — obtaining certainty about the tax treatment of a proposed transaction before it is completed.
Post-Transaction Remediation
Where an unintended CGT event has already occurred, MGS Private advises on whether any rollover, concession or other relief is available — and prepares any necessary objection or private ruling application.
Planning a transaction? Check for CGT risks first.
Brief MGS Private through your accountant or lawyer before the transaction proceeds — not after.