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Edited version of private ruling
Authorisation Number: 1011550013274
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Ruling
Subject: Capital gains tax - investments
Do the capital gains tax (CGT) provisions apply due to the maturity of your portfolio investment?
Yes.
This ruling applies for the following period<s>:
2009-10 income year
The scheme commences on:
1 July 1999
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
You and your spouse jointly held a portfolio investment.
The scheme was a ten year investment that recently matured. You had to exercise one of four options by the maturity date. They were:
Option 1. Sell your investment on the ASX prior to the maturity date
Option 2. Receive a cash payment following the maturity date
Option 3. Make the final payment (residual outstanding amount) and acquire the portfolio of shares from the issuer, or
Option 4. Nominate a partial completion.
You chose the default outcome (Option 2) and received a cash payment shortly after the maturity date.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 102-20
Income Tax Assessment Act 1997 Section 102-22
Income Tax Assessment Act 1997 Section 104-25
Income Tax Assessment Act 1997 Section 108-5
Income Tax Assessment Act 1997 Section 110-25
Income Tax Assessment Act 1997 Section 110-55
Income Tax Assessment Act 1997 Section 115-5
Income Tax Assessment Act 1997 Section 115-25
Income Tax Assessment Act 1997 Section 116-20.
Reasons for decision
While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision.
Summary
The CGT provisions apply due to the maturity of your portfolio investment.
Detailed reasoning
The application of the CGT provisions to your situation depends on the nature of the assets that you actually owned.
The CGT provisions apply to a CGT asset that you own if a CGT event happens to that asset.
The CGT assets owned by you were your one-half interest in the investments.
The CGT event that happened to them was the maturity of the investments. Your ownership of them ended on this date.
The CGT provisions apply to determine whether you made a capital gain or a capital loss due to the CGT event happening.
You made a capital gain if your capital proceeds were more than the cost base of your interest in the investment. You made a capital loss if those proceeds were less than the reduced cost base of the investment.
Your capital proceeds were the amount that you receive due to the maturity of the investments. Your cost base and reduced cost base will be the amount you paid to acquire your one-half interest in the investments.
You will be entitled to claim the 50% CGT discount if you made a capital gain due to the maturity of the investments as you have owned them for more than 12 months.
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