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Edited version of private advice
Authorisation Number: 1051880637055
Date of advice: 9 August 2021
Ruling
Subject: Children's shares
Question
Did you own the shares for CGT purposes just before the off-market transfer?
Answer
No. It is accepted that you were not the beneficial owner of the shares and you meet the requirements detailed in Taxation Determination TD 2017/11 (which is about interest income in a bank account). Further information about Children's share investments can be found by searching 'QC 16210' on ato.gov.au
This ruling applies for the following periods:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts
You set up a share bare trust known as person A <ATF person B (your child) when they were a minor.
The account was established with a financial institution on about 20XX.
The stocks transferred in were stock A, stock B and stock C.
Two parcels (stock A & stock B) were then sold and the funds were consolidated into stock C. around 20XX.
You purchased on your child's behalf further small holdings of shares in 20xx and another small parcel on 20XX.
All purchases of the shares were made with my child's birthday, Christmas and gift money.
Since establishment all dividends have been reinvested.
You were assessed on any earnings.
Your child's individual account was established recently and the Trust account was closed after a period of time. The share portfolio was transferred to your child via off-market transfer.
Your child is now the legal owner of the shares.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 106-50