Private ruling: CGT - Shares
Date of advice: 20 November 2025
Published: 5 January 2026
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Does the Commissioner consider that the original transfer of the excess shares to Person A on DD MM YYYY constitutes CGT event A1 under section 104-10 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No. Person A was entitled to a X share of the shares in the deceased's estate. The distribution of a significantly larger number of shares occurred due to an inadvertent administrative error by the executors, not a deliberate act. Under section 104-10 of the ITAA 1997, CGT event A1 occurs when there is a disposal of a CGT asset for consideration. The original transfer was not a disposal for value but an accidental over-allocation during estate administration. As there was no change in beneficial ownership intended and no capital proceeds received, CGT event A1 does not apply. | Q2: Does the Commissioner consider that the second transfer of the excess shares back to the estate on DD MM YYYY constitutes CGT event A1 under section 104-10 of the ITAA 1997? | A2: No. Once the error was identified, the executors acted promptly to rectify the situation by requesting Person A return the excess shares to the estate. This corrective transfer was not a commercial transaction and involved no consideration. The transfer was solely to restore the estate to its original position. Because the transfer did not result in capital proceeds or a genuine change in beneficial ownership, CGT event A1 does not apply.

Relevant facts and circumstances: On DD MM YYYY, the deceased died, leaving a Will. On DD MM YYYY, the Supreme Court granted Probate of the Will to Person B as executor and trustee of the estate. After some specific bequests, the Will directed the residue of the estate as follows: • X to a charity • X to Person C • X to Person A • X to Person D The estate included a significant shareholding. On DD MM YYYY, Person B erroneously transferred X amount of the shares to Person A instead of their X amount entitlement, resulting in an overdistribution of approximately $X (the excess shares). This error was identified before any other share distributions occurred. The net capital gain to the estate, based on market value at the date of transfer of the excess shares, was approximately $X. On DD MM YYYY, when reviewing the estate administration, Person B discovered the error, that Person A had received more shares than they were entitled to under the Will. On DD MM YYYY, a letter was issued to Person A advising of the error. On DD MM YYYY, Person A, acknowledged the surplus, and promptly transferred the excess shares back to the estate. This corrective transfer triggered CGT event A1 for Person A, resulting in a gross gain of approximately $X (non-discountable, as the shares were held for less than 12 months).

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10