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Edited version of private advice
Authorisation Number: 1051553891627
Date of advice: 24 July 2019
Ruling
Subject: Transfer of shares
Question 1
Does capital gains tax apply on the transfer of shares from your joint shareholdings?
Answer
No. Based on the evidence you have provided, we accept that an error was made and there has been no change in beneficial ownership for the shares.
Question 2
Will capital gains tax apply on the subsequent transfer of legal ownership of the shares to the joint shareholdings?
Answer
No. Based on the evidence you have provided, there will be no change in beneficial ownership of the shares to correct the error. Hence, there is no acquisition or disposal for CGT purposes. You are not liable to pay capital gains tax on the relevant transfer of shares.
This ruling applies for the following period:
Year ended 30 June 20xx
The scheme commences on:
1 July 20xx
Relevant facts and circumstances
Shares were originally jointly owned by persons A, B and C.
Person C passed away.
Person A transferred the shares into the name of Person A and Person B as the surviving joint holders.
On the same day, Person A erroneously transferred all shares from the name of Person A and Person B to a holding in the name of Person A only.
Person B authorised the transfer with the belief that they still retained the interest in the shares and that the second transfer was required also required.
Some shares have been sold and the capital gains have been reported individually by Person A and Person B.
Persons A and B approached a broker about selling the shares. This was after the transfer forms had been processed.
Values of the shares have been provided along with substantial evidence that Person B remained the beneficial owner of their interest in the shares at all time.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 102-20
Income Tax Assessment Act 1997 section 104-10
Income Tax Assessment Act 1997 section 109-5
Income Tax Assessment Act 1997 section 116-20
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