Taxation Determination

TD 98/25

Income tax: capital gains: is there a CGT event when an investor pays the final instalment under the Commonwealth Bank of Australia (CBA) and Telstra public share offers and the shares are transferred to the investor?

This version is no longer current. Please follow this link to view the current version.

  • Please note that the PDF version is the authorised version of this ruling.
    This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

FOI status:

may be releasedFOI number: I 1017835

Preamble
This Determination is a 'public ruling' for the purposes of Part IVAAA of the Taxation Administration Act 1953 and is legally binding on the Commissioner. Taxation Rulings TR 92/1 and TR 97/16 together explain how a Determination is legally or administratively binding.
Date of effect
This Determination applies to years commencing both before and after its date of issue. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20).

1. Investors in the CBA and Telstra public share offers were invited by the Commonwealth to make offers to purchase shares in the respective companies. If an application was successful, shares were allocated to the investor. Those shares were then transferred, at the direction of the investor, to a security trust to protect the vendor's interest in the unpaid final instalment. The trustee of the security trust issued instalment receipts as evidence of the investor's beneficial interest in the shares.

2. On payment of the final instalment and transfer of the shares from the trustee to the investor no CGT event occurs.

Note: CGT event A1 will happen on a disposal of the shares (or instalment receipts if sold earlier) and it is at this point that it will be determined whether a capital gain or a capital loss arises.

Commissioner of Taxation
11 November 1998

Not previously issued in draft form

References

ATO references:
NO NAT 98/11077-2; CPL/P/99/34

ISSN 1038 - 8982

Subject References:
acquisition of shares
capital gains
capital gains tax
disposal of shares

TD 98/25 history
  Date: Version: Change:
You are here 11 November 1998 Original ruling  
  25 January 2017 Withdrawn  

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).