By Carly Boekee, Associate
No CGT roll-over relief available for transfers to a discretionary trust
In Ellison v Sandini Pty Ltd  FCAFC 44 the Full Court of the Federal Court found that roll-over relief cannot apply where CGT assets are transferred from a company, trust or spouse to a discretionary trust rather than a spouse or former spouse. The case concerned the transfer of shares in a mining company owned by a trust controlled by the husband to the corporate trustee of a trust controlled by the wife. The transfer was pursuant to consent orders made under section 79 of the Family Law Act 1975 (Cth).
The majority held that the Family Court orders did not effect a change in beneficial ownership of the shares as required for roll-over relief to apply. The change in beneficial ownership occurred when the husband’s company executed the share transfer form or on registration of the corporate trustee of the wife’s trust as the new shareholder. Thus the wife was not a party to the CGT event. No roll-over relief was available and CGT was payable on the transfer.