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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your written advice

Authorisation Number: 1012994749418

Date of advice: 8 April 2016

Ruling

Subject: Capital gains tax - same-asset rollovers

Question 1

Will you be eligible for the capital gains tax (CGT) same-asset rollover relief when you transfer your shares to your discretionary family trust?

Answer

No.

This ruling applies for the following periods:

Year ending 30 June 2016

The scheme commences on:

1 July 2015

Relevant facts and circumstances

You hold a percentage of shares in company A.

You are considering on transferring your shares in company A, at original cost into your discretionary family trust.

The discretionary trust has a corporate trustee.

You are the sole director and sole shareholder of the trustee company.

You are also the sole nominated beneficiary in the trust deed.

Relevant legislative provisions

Income Tax Assessment Act 1997 Division 126,

Income Tax Assessment Act 1997 section 104-60,

Income Tax Assessment Act 1997 section 112-140 and

Income Tax Assessment Act 1997 section 112-150.

Reasons for decision

Under Division 126 of the Income Tax Assessment Act 1997 (ITAA 1997) you may be able to defer a capital gain or capital loss when assets are transferred or disposed of in the following circumstances:

    • an individual or trustee transfers a capital gains tax (CGT) asset to a wholly owned company

    • partners transfer their interest in a CGT asset to a wholly owned company

    • related companies transfer a CGT asset between them

    • a trust disposes of a CGT asset to a company under a trust restructure

    • a change to the trust deed of a complying approved deposit fund, a complying super fund or a fund that accepts worker entitlement contributions triggers a CGT event for the fund

    • a CGT asset is transferred from one small super fund to another because of a breakdown of the relationship between spouses or former spouses

    • a trustee of a trust creates a trust over a CGT asset or transfers a CGT asset to another trust where both the transferring and receiving trusts meet certain requirements.

As your arrangement does not meet one of the circumstances above, you would not be entitled to CGT same-asset rollover relief.


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