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Edited version of private advice
Authorisation Number: 1051907583085
Date of advice: 07 October 2021
Ruling
Subject: CGT and rollover effect
Question
Will roll-over relief be available under Subdivision 122-A of the Income Tax Assessment Act 1997 (ITAA 1997) where you transfer shares owned personally to a company wholly owned by you, when that company is a newly established company with no assets owned prior to the transfer of shares?
Answer
Yes. Roll-over relief be available under Subdivision 122-A of the ITAA 1997 where you transfer shares owned personally to a company wholly owned by you.
This ruling applies for the following period:
Year ending 30 June 2022
The scheme commences on:
1 July 2021
Relevant facts and circumstances
You are considering transferring shares you own personally to a new company, where you will be the sole director and shareholder.
You are, and the new company once incorporated will be, a resident of Australia for Australian income tax purposes.
An off-market share trade will be completed to transfer the shares at their current value from you to the new company.
The consideration received will be shares in the new company.
The shares in the new company will not be redeemable shares.
The market value of the shares received for the trigger event will be substantially the same as the market value of the CGT asset created in the new company.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 122-20
Income Tax Assessment Act 1997 section 122-25
Income Tax Assessment Act 1997 section 122-35