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Edited version of your private ruling
Authorisation Number: 1012155358817
This edited version of your ruling will be published in the public register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
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Ruling
Subject: Capital gains tax - capital gains tax event A1
Question: Will you trigger a capital gains tax event A1 by the actions you undertake?
Answer: No.
This ruling applies for the following period
Year ended 30 June 2012
The scheme commenced on
1 July 2011
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 are an associate of the director of company A.
You are going to start a new business undertaking similar work as company A.
Your business will market the same industry including the same clients as company A.
You are not disposing of any assets or interests in starting you new business.
You will be employing a person who was employed by company A.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 104-10.
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.
The most common capital gains tax (CGT) event, CGT event A1, occurs when you dispose of a CGT asset, the time of the event is when you enter into the contract for the disposal or if there is no contract - when the change of ownership occurs.
Many CGT assets are easily recognisable - for example land, shares in a company. Other CGT assets can include contractual rights, options, foreign currency and goodwill.
In your case, there will be no disposal of any CGT assets.
Therefore, a CGT event A1 will not occur.
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