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Edited version of your private ruling
Authorisation Number: 1012229407907
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Ruling
Subject: Shares transferred to SMSF by the beneficiary
Question: Is the cost base of the shares transferred into the superannuation fund by the sole beneficiary the market value on the date of transfer?
Answer:
Yes.
This ruling applies for the following period
Year ended 30 June 2013
The scheme commenced on
1 July 2012
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.
The self managed superannuation fund (SMSF) is a single member fund.
The beneficiary of the SMSF acquired shares in 200X solely in their name.
The beneficiary is going to transfer all their shares into the SMSF.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 112-20
Income Tax Assessment Act 1997 Subsection 104-60(4)
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.
A capital gains tax (CGT) event happens if a person transfers a CGT asset to an existing trust.
In your case, the beneficiary of the SMSF is transferring a CGT asset, the shares they acquired in 200X to you as the trustees of the SMSF.
The first element of your cost base and reduced cost base of a CGT asset you acquire from another entity is its market value (at the time of acquisition) if you do not incur expenditure to acquire it.
In your case, as you will not pay anything to acquire the shares so you are taken to have acquired the shares for their market value on the date of transfer.
Therefore, the cost base of these shares will be their market value on the date of transfer.