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Edited version of private advice
Authorisation Number: 1052082614099
Date of advice: 31 January 2023
Ruling
Subject: CGT - shares
Question:
Will any capital gains tax event occur to you when the transfer occurs?
Answer:
No.
When applying the principles contained in Taxation Ruling IT 2540 to your situation:
• You and Person A each have an equal interest in each share
• When either you or Person A dispose/transfer your respective interest in a share, a capital gains tax event will occur for the person disposing/transferring their interest and they will need to determine any capital gain or capital loss made on the disposal/transfer of their interest in the share; and
• As you will not be disposing/transferring your interests in the Shares and will continue to hold them after the proposed transfer of Person A's interests in the Shares, no capital gains tax event will occur for you and there will be no capital gains tax implications for you because of the proposed transfer.
This ruling applies for the following period:
Income year ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
You and Person A jointly purchased shares (the Shares) in which you each hold an equal interest in each share.
Person A wants to sell their interests in the Shares and is considering transferring their interest in the Shares to Person B, via an off-market transfer. Following the proposed transfer, you will continue to hold your interests in the Shares.
For the purposes of this ruling, Person A will transfer their interests in the Shares to Person B and you will continue to hold your interests in the Shares following the transfer.
Relevant legislative provisions
Income Tax Assessment Act 1997 Part 3-1
Income Tax Assessment Act 1997 Part 3-3