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Edited version of private advice
Authorisation Number: 1012609810139
Ruling
Subject: Capital gains tax - transfer of shares to children
Question 1: Can you transfer the deceased's interest in the shares they jointly acquired with their spouse to their children?
Answer:
No.
This ruling applies for the following period
Year ended 2014
The scheme commences on
1 July 2013
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 deceased and their spouse jointly acquired shares after 20 September 1985.
The deceased passed away last year.
Under the deceased's will, their spouse was bequeathed a property and their personal chattels.
The residual of the deceased's estate both real and personal were bequeathed to their children.
The deceased's interest in the shares will be transferred to the deceased's children.
You have provided copies of documentation to support your application and this documentation is to be read with and forms part of your application for the purpose of this ruling.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 118-195
Income Tax Assessment Act 1997 Section 128-50
Reasons for decision
Deceased Estate
If you acquire an asset owned by a deceased person as their trustee/executor or beneficiary, you are taken to have acquired the asset on the day the person died.
If a deceased person acquired their asset on or after 20 September 1985, the first element of your cost base and reduced cost base is taken to be the deceased person's cost base and reduced cost base of the asset on the day the person died.
Joint owners
For capital gains tax (CGT) purposes, individuals who own an asset as joint owners are each treated as if they own an equal interest in the asset.
When a joint tenant dies, their interest in the asset is taken to have been acquired in equal shares by the surviving joint tenant on the date of death.
As the trustee of the deceased estate you do not own the deceased's shares as the ownership of these shares automatically transferred to the deceased's spouse as they owned these shares jointly.
Therefore, you cannot transfer the ownership interest in the shares to the deceased's children.