In recent years, the ATO has focused on trusts developing and selling properties as part of their normal business.

When these developed properties are sold, some trusts incorrectly claim a 50% CGT discount.

The ATO will continue to target arrangements that display the following characteristics:

• clients have experience in either developing or selling property (or experience in the industry) and establish a new trust to acquire property for development and sale;
  

• circumstances surrounding the arrangement are inconsistent with the stated purpose of developing the property as a long term investment;
  

• the development is advertised as available to purchase before completion, or is sold soon after completion; and
  

• the trustee claims the 50% CGT discount on the sale of the property.