CGT MARRIAGE BREAKDOWN ROLL-OVER: THE SANDINI CASE REVISTED

A recent case before the Full Federal Court has tested the limits of the CGT marriage breakdown rollover relief. In Ellison & Anor v Sandini Pty Ltd & Ors; FC of T v Sandini Pty Ltd & Ors [2018] FCAFC 44, the court held that the CGT marriage breakdown rollover relief (CGT rollover) cannot apply where CGT assets are transferred to a discretionary trust. For CGT rollover to apply, the CGT assets must go to the spouse or former spouse personally.

The court, which overturned the decision of the single judge in the lower court (Sandini Pty Ltd & Ors v FC of T & Ors [2017] FCA 297), also made a number of interesting observations regarding the application of CGT event A1.