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Edited version of private advice
Authorisation Number: 1052415019657
Date of advice: 30 June 2025
Ruling
Subject: CGT - legal vs beneficial
Question
Will a capital gains tax (CGT) event occur if you transfer the legal ownership of shares to your child?
Answer
No. CGT event A1 happens when you dispose of a CGT asset. You dispose of a CGT asset if a change of ownership occurs from you to another entity. We consider that your child has always been the sole beneficial owner of the shares, and no CGT event will happen when you transfer the shares to your child.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commenced on:
XX March 20XX
Relevant facts and circumstances
You are parent of X (your child).
On XX 20XX, you purchased $X of the X share on X's behalf.
The purpose was to contribute toward X's future car or home purchase when they grow up.
The shares were purchased in your legal name, however acting in the capacity as trustee for X.
All dividend income has been reinvested through a dividend reinvestment plan.
The current value of the share account is approximately AUD X.
The dividend income has been declared on your income tax return due to your mistake.
You intend to transfer to X through an off-market transaction during the ruling periods.
You will not receive any consideration on the transfer of the shares to X.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 102-20
Income Tax Assessment Act 1997 Section 104-10
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